New Delhi, Jan. 6 -- The economy appears to be on a stable footing ahead of the Union budget. Growth clocked 6.5% in 2024-25, public capital expenditure crossed Rs.11 trillion, its highest share of GDP in 15 years, and inflation has largely stayed within the Reserve Bank of India's (RBI) tolerance band.

Yet, a troubling imbalance lies beneath the macro aggregates. Private capital has not responded with the breadth or momentum one would expect at India's current stage of development. The public sector is doing most of the heavy lifting on capex, while the private sector, despite strong balance sheets and ample liquidity, has been cautious on long-term investment.

According to rating firm ICRA, over the past decade, joint-stock companies ...