NEW DELHI: Chief Economic Adviser V Anantha Nageswaran on Thursday said there are signs of private sector investment cycle unfolding and sectors like steel and cement have reached a stage where greenfield investment will take place.

“We do see signs of corporate sector beginning to make investment. There are some new investment announcement,” he said at an event organised by CII.

Based on data available for the first six months of the last three years, he said, it was Rs 2.1 lakh crore in 2020-21, it was Rs 2.7 lakh crore in 2021-22 and Rs 3.3 lakh crore in 2022-23.

“So, it has been rising and once we get the full year data, the picture will be clear. We know that internal resource generation of the companies are at very high level. Therefore, they may not necessarily have to tap either the capital market or the banking channel,” he said.

Expressing optimism about private sector capital formation cycle in the country, he said, “we have been waiting for it. It’s already unfolding...it is unfolding at steady pace.” Capacity utilisation in some sectors like steel and cement has reached a point where greenfield investment have to happen, he added.

Observing that energy is an important driver of economic growth, he said, it is energy security that is coming under a lot of pressure thanks to geopolitical developments and climate change.

“If there is a single-most important worry in my mind, for sustaining the growth rate that we have been able to achieve in the last 2-3 years, it is energy security. We cannot completely swear off fossil fuels.

“We do have a target to balance the proportion of non-fossil fuels and fossil fuels in our energy mix in terms of installed capacity by the year 2030... It is equally important we understand that there are important roles for fossil fuels - if not coal, then for gas, etc,” he said. And so, he said, if the financial industry completely avoids funding fossil fuel-based power generation projects, then economic growth will suffer.