Private investments — which had lagged the strong public capex momentum of the last three years — are set to make a big comeback in the next 24 months, using the existing opportune moment for a structurally strong Indian economy, the new CII President R Dinesh has said.

“The platform (for a structurally strong economy) has now been built. On this, you build the effect of an ongoing moderation in inflation and softening of input costs. Clearly, as long as return metrics are higher than cost of capital, people are going to make investments,” Dinesh told businessline in his first interview after assuming charge at the helm of the Confederation of Indian Industry (CII).

He said most CEOs (CII members) are now penciling in inflation between 4.5-5.5 per cent this fiscal. 

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Private investment commitments in the Indian economy have shot up to ₹29.1 lakh crore from ₹14.2 lakh crore in one year, and this was a good pointer to ramp up private investments.

With a cricket analogy, Dinesh noted that Corporate India is all set for some big hitting (on investments) in the next couple of years.

“Is the stage set for some big hitting by corporate India? I do think so. The platform is there. On whether the batsman is seeing the ball like a football, that I don’t know. I can definitely say that he can (do big hitting) as the pitch is good. The bowling is unlikely to surprise him,” Dinesh said. 

“Right now the balance sheets are clean. Most corporates have used the pandemic to sort out their balance sheet issues. They have deleveraged in a big way. Now they are poised to take off, riding the next investment cycle”.

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Asked if he expects the US to go into recession, Dinesh replied in the negative. “I don’t see it coming right now as data points are coming in strong,” he said.

Dinesh also said capacity utilisation in most industries in India had crossed 75 per cent and even 80 per cent in some sectors. The demand outlook was strong, which could encourage corporates to pump in fresh investments in sectors such as metals and infrastructure.