Paytm founder and CEO Vijay Shekhar Sharma on Thursday raised concerns over India's weakening private corporate investment, questioning whether the country's economic growth was increasingly being driven by government spending.

"Private corporate investment peaked around the 2010s and almost half that level now. Seems like GDP growth heavy-lifting done by government spending. Is it so?" Sharma wrote on X.

The Paytm founder shared a graphic showing private corporate investment falling sharply from nearly 27% of GDP in 2011 to around 12% by 2026. According to the chart, the steepest decline came during the "twin balance sheet deleveraging" phase between 2012 and 2019, when investment dropped from roughly 24.5% to 13.5% of GDP.

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The data also suggested that private investment failed to recover meaningfully after the Covid pandemic, hovering in a narrow range of 11.5% to 12.2% of GDP between 2020 and 2026 despite broader claims of economic resilience.

Sharma's remarks come amid growing concern among economists that weak private investment could undermine India's long-term growth ambitions.

Earlier this week, economist Surjit Bhalla argued that India had increasingly substituted public infrastructure spending for private investment over the last decade.

"What has happened over the last 10 years, we have substituted government investment that is public infrastructure investment for private investment. Our total investment to GDP ratio has stayed almost exactly the same as 32%," Bhalla said in an interview with India Today.

"While we all welcome the government investment, private and foreign direct investment is a lot more productive for the economy than government investment," he added.

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Bhalla blamed weak foreign investment partly on India’s 2015 Bilateral Investment Treaty, saying its provisions discouraged investors.

"In 2015, we passed what was called the new bilateral investment treaty. According to the new treaty, if a foreigner and a domestic investor wanted to go for a divorce, the government would not allow it and would say, 'Stay put for 5 years before you do anything.' No other place on planet Earth has such a rule," he said.

"The foreign investment is not taking place. The investment climate is bad. Domestic investors are going outside, and we are chugging along at 6%," Bhalla added.

Former Chief Economic Adviser Arvind Subramanian has also identified weak private corporate investment as the economy’s central challenge.

"This peaked at 17 per cent of GDP in the early 2000s and today is at half that amount," Subramanian write in The Indian Express.

While acknowledging reforms such as GST simplification, labour-law changes and foreign investment liberalisation, Subramanian argued that investors remained unconvinced about the broader business climate.

"The key distinction that hints at a resolution of the paradox - and explains weak private investment - is between actions taken by the government on paper that affect the costs of doing business and the deeper instincts of the government that affect the risks of doing business on the ground," he wrote.

Published on: May 28, 2026 12:50 PM IST