Private Investment in India: Data and Measurement Issue at the state level

One of the remarkable features of economic reforms in the 1990s has been the rise in the volume and importance of private investment i.e., both foreign and domestic in India. In this context this paper attempts to estimate the domestic private investment at the aggregate and sectoral levels in India. Second, the role of private investment has an important role in wiping out the inter-state disparity in economic growth. Due to data constraint on inter-regional allocation of private investment, this study aims to estimate the inter-state private investment in India, by allocating the national investment on the basis of share of GSDP of states and national public investment on the basis of the share of combined capital expenditure. In addition, national net inflow of FDI is allocated across the states in order to generate the foreign part of states private investment. All these estimates are based on the National Income Statistics. The analysis and estimates of the paper demonstrate the utililisation and applicability of National Accounts Statistics for further studies on inter-regional allocation of private investment in post reform periods in India.