Report: New round of private sector investment due to debt reduction and government incentives, claims CRISIL report

New Delhi| The country’s private sector is now in a better position to invest than it was a decade ago. According to the report released by CRISIL Intelligence on Tuesday, there has been a significant improvement in the financial condition of private companies, which will make it easier for them to make new investments. According to the report, private companies have continuously reduced debt in the last few years.

This has strengthened their ledger. This has been due to lower capital expenditure, government initiatives to boost infrastructure, issuance of new shares and better capacity utilization. There has been a significant improvement in the net worth ratio compared to the debt of companies. This has decreased from 1.05 times in FY 2015 to an estimated 0.50 times in 2025. With this, companies have enough scope to take new loans for expansion.

Facility to get loan due to reduction in NPA
Due to reduction in NPA of banks, industries are getting convenience in getting loans. The recapitalization of over 3.3 lakh crore of public sector banks between 2017 and 2021 has helped them clean up the ledger and improve capital strength. Gross NPAs of banks have declined from 11.2 per cent in March, 2018 to 2.5 per cent in March, 2025.

Getting encouragement from government policies
Government policies have also played an important role in encouraging private investment, the report said. Production-linked incentive schemes, Make in India initiatives, FDI policies, corporate tax cuts, infrastructure development and digital public infrastructure have contributed to improving the investment environment. The growth rate of private consumption stood at 5.6 per cent in FY2024 due to the increase in demand, which is expected to reach 7.6 per cent in 2025.