Modi Calls for Private Sector Investment & Fair Wage Growth in India’s Economy

Modi Calls for Private Sector to Drive India’s Next Growth Phase

New Delhi – Prime Minister Narendra Modi on Sunday urged India’s private sector to significantly increase investment, particularly in research and development, to propel the nation’s economic growth and global competitiveness. Speaking in a written interview with the Press Trust of India, Modi emphasized that while the government has laid a strong foundation through substantial capital expenditure, sustained economic success hinges on a “decisive response” from the private sector.

The Prime Minister highlighted the government’s commitment to infrastructure development, noting that the FY27 Budget allocates ₹12.2 trillion (approximately $146 billion USD) to capital expenditure – a fivefold increase compared to 2013. This investment will prioritize rail, road, digital, and energy infrastructure, alongside efforts to streamline compliance and improve credit flow, all aimed at fostering job creation and economic momentum.

“Policy can only create the enabling framework,” Modi stated. “The next phase of transformation requires a decisive response from the private sector.” He specifically called on Indian firms to “invest more aggressively in research and development, adopt frontier technologies, deepen supply-chain capabilities and compete on quality and productivity rather than on protected margins.”

Modi stressed the importance of equitable distribution of productivity gains, stating that as productivity rises, the benefits “must be shared fairly between workers, shareholders and owner-managers.” He argued that sustainable growth is contingent upon “social legitimacy,” achieved through rising real wages, skill development, and stable employment, which in turn bolster domestic demand and social cohesion.

The Prime Minister characterized this year’s budget as a forward-looking plan, deliberately avoiding “short-term populism” in favor of long-term investments in infrastructure. He described it as a “we are ready” moment, born out of preparation and inspiration, rather than a reactive measure.

Beyond domestic investment, Modi also discussed the significance of recent free trade agreements (FTAs) secured with Australia, New Zealand, the UK, the EU, and the US. He asserted that these agreements are designed to integrate Indian businesses, particularly Micro, Small and Medium Enterprises (MSMEs), into global trade networks, offering access to key markets with reduced tariffs.

“These FTAs also anchor domestic reform to external commitments,” Modi explained. “They widen export opportunities, reduce tariff disadvantages relative to competitors, and integrate Indian firms more deeply into global value chains.” He contrasted this success with previous attempts to secure trade deals, which he characterized as marked by “uncertainty, and inconsistency.”

Modi acknowledged that India now has FTAs with 38 partner nations, a milestone in the country’s trade history. He emphasized the diversity of these partnerships, spanning continents and encompassing countries with varying economic strengths, providing Indian manufacturers and producers with a broad range of export opportunities.

When asked about the progress of economic reforms, Modi expressed a persistent drive for improvement. “By temperament, I am never fully satisfied,” he said. “I believe public life demands a certain constructive restlessness, a constant urge to do more, to improve faster, to serve better.”

The Prime Minister pointed to capital accumulation, labor formalization, and digital public infrastructure as key factors elevating India’s potential growth rate to 7 percent. He reiterated that productive spending remains a hallmark of his government’s approach.

The Congress party criticized the interview, labeling it a “scripted exercise,” but the Prime Minister’s message remains clear: India’s economic future depends on a strong partnership between government investment and private sector innovation.