Public Assets, Private Capital: India's Next Reform Step

Updated: Jun 17, 2026 12:00 pm IST Published On Jun 17, 2026 11:59 am IST Last Updated On Jun 17, 2026 12:00 pm IST

Published On Jun 17, 2026 11:59 am IST

Last Updated On Jun 17, 2026 12:00 pm IST

The promise of peace in the Middle East is weaving its way past the Strait of Hormuz. Donald Trump's self-certified 'great deal' is yet to arrive, even if piece by piece. That thought hasn't detained the markets, which have brushed aside words, events and doubts. Stock indices are up, bond yields are down and most importantly crude oil prices have tumbled. Feel-good clouds are ephemeral, transient by definition. Mood is not capital. Sentiments are a sugar rush - they spike, flatline and reverse, often violently when expectations are not met.

India is the fastest-growing large economy, but the fundamentals are not all rosy. Yes, the Rupee is hanging in there - thanks to the RBI's emergency measures. That said, forecasts suggest growth is lower and inflation is higher, FIIs are unloading equity, and net FDI is spluttering. It is known that markets are focused on the immediate and underestimate the long term. Energy prices will be volatile - even if supply lines are unclogged, restoration of gas and oil output to pre-war levels could take two years, as per the IEA.

The global context is not entirely rosy, even though markets are buoyant. Availability of capital will be critical as the world migrates from a context of demand deficit to supply insufficiency - the shift ranges from funding AI and AI adjacent capex to reshoring of manufacturing to rebuilding energy grids. Global capital expenditure on energy alone is expected to top $ 3.4 trillion in 2026. Add the capex of AI giants estimated at $ 700 billion and other sectors for the math on the need for capital.

The global economy is moving into a higher inflation and higher for longer interest rates regime. Debt and deficits are higher. Central banks are signalling rate hikes - the Bank of Japan and ECB  have already hiked rates. The quantum shift is reflected in Nvidia's borrowing programme. It is the world's most valued company with over $ 80.5 billion in cash in hand. Yet it is in the market for raising $ 25 billion in debt. The world is moving from a demand-deficient circumstance to a supply-constrained context. As demand for capital rises, so will the cost of money.

India needs a plan for what Keynes called........

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