There is a positive tailwind for the economy right now. Last quarter, our gross domestic product (GDP) grew 7.7%. Our economists believe it will grow 7.4% in FY19 and 7.6% in FY20. Bear in mind that these growth rates are coming on the back of many structural and seminal changes such as implementation of the goods and services tax and demonetization.

It’s heartening to observe the emergence of green shoots in certain sectors of the economy. For instance, commercial vehicle sales—small, medium and heavy put together—grew 18.5% in FY18, the highest percentage in five years. Most of the other data points are also encouraging.

Passenger vehicle sales are up 37%, two-wheeler sales up 22%, PMI (Purchasing Managers Index)_ for manufacturing and services are expanding, improvement in bank credit growth, etc., all put together indicate a continuous improvement.

Three years ago, we were building roads at a rate of 12km per day and in 2018 we have doubled it to about 27km a day. All in all, this suggests green shoots of economic recovery are visible.

Are we seeing private investment returning? If you look at growth, it also manifests across sectors in terms of capacity utilization, which was stagnating at 71-72% levels for three to four years, has now crossed 74% across sectors. If you look at specific sectors, steel is witnessing capacity utilization of around 86% and, hence, talks of fresh investments is happening in steel. We believe there is a lot of pent up demand, which will lead to consumption, thus fuelling capacity utilization. Once most industries hit the 80-85% capacity utilization mark, fresh investments will follow.

How is this sentiment translating on ground? Corporates initiate capacity expansion only after measuring the utilization levels of their factories. As I said before, some of the sectors are reaching that threshold level, making corporates think of investing funds to either expand the existing capacities or build new ones. Based on the current capacity utilization levels across sectors, I believe the next private capex cycle is 12 to 18 months away. Some of this capex will also be supported by the foreign direct investment route as MNCs look to ride the India growth story.

Are MNC clients bullish on India? We deal with a large number of MNCs and all of them are bullish and committed to the India growth story. MNCs see India as part of their strategy to de-risk from China, especially at a time when there is uncertainty around how the US and China trade issue will pan out. India is a market they understand well. This positive sentiment towards India in most global corporate boardrooms augurs well even as the government makes rapid strides in improving the ease of doing business in the country.