Private investment rises as Indian firms clean up balance sheets: Sitharaman | Today’s news

India is experiencing a revival in private investment, with domestic companies strengthening their balance sheets and attracting capital to sectors such as renewable energy, semiconductors, pharmaceuticals and aerospace, Union Finance Minister Nirmala Sitharaman said at the Bloomberg New Economy Forum on Tuesday.

“Today, I can say with confidence that private capital is moving in. India’s domestic private capital is moving in and it is also attracting private capital from elsewhere,” Sitharaman said, adding that companies are investing in sectors that could be within or outside their core business.

She said India had gone through a difficult phase after 2013-14 when mismanagement of assets and the inability of some companies to repay bank loans damaged both corporate and bank balance sheets.

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Finance Minister Nirmala Sitharaman said many companies had cleaned up their balance sheets, settled debt and built substantial cash reserves. Banking sector reforms also addressed earlier balance sheet problems.

Sitharaman listed renewable energy, semiconductor manufacturing and design, biosimilars, pharmaceuticals, generics, and aircraft maintenance, repair and overhaul facilities.

The government uses National Infrastructure Pipeline (NIP), NaBFID and NIIF. NIP lists projects for investors, NaBFID provides patient capital for long-term, high-risk projects, and NIIF mobilizes funds through investment vehicles.

The publicly available NIP lists infrastructure projects from the Center and states. Investors can search for opportunities by industry and state.

No. Sitharaman said the government would hear investors’ views during the budget consultation, but did not announce the change. SBI Research has recommended scrapping LTCG tax on shares; this recommendation is not a government decision.

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“There were bad times when we called it, you know, balance sheet problems. Bank balance sheets suffered. Corporate balance sheets suffered because of poor asset management,” she said.

The government subsequently implemented reforms to address problems in the banking sector, while many private companies also cleaned up their balance sheets and settled their debts, she said. Several companies now have significant cash reserves, she added.

These remarks assume significance as Sitharaman presented India’s investment opportunities to global institutional investors and financial institutions during her recent visit to Singapore. It highlighted infrastructure, semiconductors, artificial intelligence (AI), renewable energy and financial services as key areas to attract greater capital flows.

Sitharaman said the government introduced a preferential corporate tax regime in 2019, but the pandemic and subsequent uncertainties delayed investment decisions.

“Today, I can say with certainty that private capital is moving in,” she said, pointing to investments in renewable energy, chip manufacturing and design, biosimilars, pharmaceuticals, generic drug manufacturing and aircraft maintenance, repair and overhaul (MRO) facilities.

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Long-term capital

India’s growing aviation market creates opportunities for investment in MRO facilities, she said. Indian airlines have placed orders for new aircraft as the country’s civil aviation sector expands.

“Someone gave me a rough estimate between now and 2030, we’ll probably get a new plane every week,” she said, adding that India’s civil aviation sector was growing at about 16%, significantly faster than global civil aviation.

Sitharaman also highlighted the government’s efforts to attract long-term infrastructure capital through the National Infrastructure Pipeline (NIP), the National Bank for Infrastructure and Development Finance (NaBFID) and the National Investment and Infrastructure Fund (NIIF).

Launched in 2019, NIP is a publicly accessible platform where the Center and states list infrastructure projects for investors. Sitharaman said the pipeline has grown from roughly $2 trillion worth of projects at launch to more than $4.5 trillion.

Investors can search for projects by industry and state, she said, adding that the pipeline has helped investors identify opportunities. Meanwhile, NaBFID provides patient capital for high-risk, long-term infrastructure projects, while NIIF mobilizes funds through investment vehicles focused on infrastructure and real estate development.

Over the past decade, India has made significant progress in building roads, ports, airports and digital connectivity, Sitharaman said. The government intended to maintain this momentum and modernize infrastructure across sectors.

She also pointed to the growing importance of energy infrastructure as artificial intelligence and data centers demand more electricity. According to her, India has attracted capital in the manufacturing of semiconductors, transmission lines, renewable energy, green hydrogen and green ammonia.

On semiconductors, Sitharaman said India is pursuing a strategy that goes beyond advanced chips to include less sophisticated chips used in everyday products such as refrigerators, cars and IoT-connected home devices.

“India has accepted the realistic challenge that while we will also want to refine and get into finer and finer nanochips, we will also be making less finer,” she said, adding that these chips will remain critical to the Indian and global economy.

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Currency stabilization

On the rupee, Sitharaman admitted that the currency has weakened significantly over the past one-and-a-half to two years. She said the Reserve Bank of India (RBI) was taking steps to curb volatility rather than defend a particular exchange rate.

“They are not trying to fix the rupee; they are trying to stop volatility,” she said, adding that the central bank’s efforts would continue.

It attributed much of the pressure on the currency to external challenges, saying India’s macroeconomic fundamentals remained sound. According to her, the government would maintain fiscal discipline without jeopardizing social, educational and health spending.

With preparations for the Union Budget 2027-28, Sitharaman also acknowledged the debate on long-term capital gains tax, securities transaction tax and treatment of various asset classes.

She said the issues were widely discussed by investors in India and abroad, but declined to say whether the government would make changes in the upcoming budget.

“It’s healthy to have this debate and I’m happy to hear it,” she said.