China factor delaying private investments: Sanjiv Puri

New Delhi: China’s surplus capacity is dampening Indian business’ spirit for adding further production capacity, according to Sanjiv Puri, president of Confederation of Indian Industry. Businesses are betting on a revival in government’s capital expenditure in the second half, a possible rate cut by the RBI and a pick up in rural demand due to good monsoon showers. But there are headwinds to growth and the government should continue investing in infrastructure, use proceeds of divestment in state-run companies to set up a sovereign investment fund to acquire strategic assets globally, and target subsidies by expanding direct transfer of social benefits, Puri, who is also chairman and managing director of ITC Ltd, said in an interview. Yet, the first advance estimate for FY25 GDP shows growth in investments in plant and machinery going south to 6.4% from 9% a year ago… If you look at the larger picture, it's important to recognize that the Indian economy is able to achieve the kind of numbers that are forecast despite all the challenges that we see around us, and China dumping stock all over. Government officials believe private sector salary increments have not kept pace with the increase in their profitability, but CII proposed the government should cut taxes on petrol and diesel to boost consumption.