THE HINDU | TEXT & CONTEXT 📉 Why Corporate Investment Is Still Weak… — Current scenario — TG.ME

: 📰 THE HINDU | TEXT & CONTEXT 📉 Why Corporate Investment Is Still Weak ━━━━━━━━━━━━━━━━━━ 🏭 THE CORE ISSUE India’s corporate investment has fallen from nearly 11% of GDP to ~6–7%, despite tax cuts and lower interest rates. 🔸 Smaller firms: Credit & borrowing constraints 🔸 Larger firms: Weak market demand 🔸 Result: Investment remains subdued → fewer jobs & weaker growth ━━━━━━━━━━━━━━━━━━ 📌 PRELIMS BOOSTER 🔹 Corporate tax: 30% → 22% (2018) 🔹 Demonetisation: 2016 🔹 COVID shock: 2020–21 🔹 Key concepts: Keynes’ Animal Spirits • Kalecki’s Increasing Risk ━━━━━━━━━━━━━━━━━━ 🎯 MAINS | GS-III Investment: Profitability + confidence + credit cost MSMEs: Credit-constrained Large firms: Demand-constrained Policy: Monetary easing alone may not revive investment. 💡 UPSC TAKEAWAY: When firms lack credit or demand, lower interest rates alone cannot unlock investment. Public expenditure can create demand and crowd-in private investment. 👉 @CurrentScenario