Major Sectors of ‘Public Investment’ in India
- Agriculture: India is an agriculturally rich nation and the majority of the Indian population is employed in this sector. Despite being one of the major sectors contributing to the GDP of India, it has somehow failed to attract private investment. However, this sector receives plenty of public investment each year both from the state and central governments of India. Some of the major reasons behind investment in the agricultural sector are the long-term potential, sustaining natural resources, and acting as a physical asset.
- Infrastructure: Infrastructural development has now become quite crucial for any economy as a nation with good infrastructure is more likely to attract higher FDIs. In India, there is the private sector’s dominance in investment in infrastructure. However, the central government of India did increase the public investment in infrastructure development by 10%, but still, there is a need for public investment in this sector.
- Healthcare: Similar to the infrastructural sector, investment in the healthcare sector is also dominated by private investors. But not everyone can afford private hospitals, thus a decent public investment in the healthcare sector is needed. The government of India is increasing its spending on healthcare each year by investing around 1.8% of the nation’s GDP in 2020-21 and around 2.1% in 2021-22. But still, Indian healthcare is not refined and needs more public investment.
Importance of Public Investment for India’s Economic Growth
If you take a closer look at the economic growth of any nation, you’ll find that it is mainly driven by the investments made in development works. However making huge investments in any economy is as not easy as it sounds, as huge investment can’t be done by a single person, it usually involves a group of people (investors). However still any private organization of an individual can’t invest much, thus in such a case, public investment becomes quite important. The public investment not only benefits the netizens by providing them better services at a cheaper rate but also boosts the economic growth of a nation.
For the financial year 2022-23, the Government of India has decided to increase the share of public investment by 35%.