New Delhi, July 17 -- India extracts more growth out of every rupee it invests than China did during its fastest-growing years -- but that efficiency is not a substitute for higher investment itself, the Vice Chairman of NITI Aayog, Ashok Kumar Lahiri, said on Friday.

Speaking at the release of the Investment Friendliness Index, the Vice Chairman said India's investment rate stands at around 25 per cent of GDP, roughly half of what China invested at the height of its growth boom. Yet India's incremental capital-output ratio, a measure of how much growth each unit of investment generates, is lower than China's, meaning Indian capital is being put to more productive use.

"In a way, you can say that we are using our capital very efficientl...