Private investment may finally be picking up. Companies announced investment plans worth ₹26.75 trillion between April 1 and August 5, according to Bank of Baroda’s economics research department. Most of the money, however, is concentrated in sectors that require large amounts of capital and relatively few permanent workers.
Information technology-enabled services account for ₹14.98 trillion. Almost 99% of this is concentrated in data centres and artificial intelligence projects announced by 13 companies. Electricity accounts for another ₹6.86 trillion, of which about ₹6.5 trillion comes from nuclear projects proposed by four companies.
The current investment cycle is being driven mainly by computing infrastructure and electricity.
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Private investment pours into data centres
Demand for computing capacity is rising as Indian companies adopt cloud services and artificial intelligence. Data localisation and greater use of digital systems by businesses are adding to it. KPMG estimates that India’s data-centre value chain could become a $90 billion opportunity by FY35. The government wants data-centre capacity to reach at least 10 GW by 2030.
These projects create employment during construction and operation. Data centres require engineers, electrical and cooling specialists, cybersecurity staff and facilities workers. The government has cited an estimate of one lakh engineering jobs from the sector’s expansion.
The employment numbers need to be read against the amount of capital involved. Once commissioned, data centres employ far fewer workers than large labour-intensive factories. A ₹1 trillion investment in data centres cannot be treated as the employment equivalent of the same investment in garments or footwear.
Nuclear power has much the same employment profile. Reactor construction creates work for heavy engineering companies and specialised construction services. Permanent staffing after commissioning is small relative to the capital invested.
Capital-intensive investment leaves an employment gap
India needs private investment to expand productive capacity and absorb workers seeking better-paid employment outside agriculture. The present investment cycle is doing far more to expand capacity than to create jobs at scale.
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Investment announcements in consumer goods, including automobiles, were below ₹2,000 crore. Electronics attracted roughly ₹51,000 crore, with nearly two-thirds going into solar cells and batteries. Aluminium and steel have attracted more capital as infrastructure activity increases demand.
Power, digital infrastructure and metals are therefore taking a large share of new investment. Labour-intensive manufacturing has yet to attract capital on a comparable scale.
Economist Santosh Mehrotra has repeatedly argued that India needs to move workers from agriculture into more productive non-farm employment. Such a shift requires industries capable of recruiting large numbers of workers. Textiles, footwear, food processing and electronics assembly can do this more readily than data centres or nuclear plants.
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Projected GDP growth of 6.6-6.8% and investment growth of 8.5-9.5% do not settle the employment question. The economy can become more productive without generating jobs at the same rate. Wider adoption of artificial intelligence could widen that gap.
Investment policy needs a stronger jobs link
The composition of investment deserves as much attention as its volume. Projects that expand domestic production and supply chains, support exports and employ workers have a different economic effect from projects whose main contribution is additional capital stock.
The production-linked incentive schemes offer one comparison. By March 2026, they had attracted more than ₹2.16 trillion of investment and were associated with 14.39 lakh jobs. The schemes used fiscal incentives to connect private investment with manufacturing and employment.
The ₹26.75 trillion of announced projects suggests that private capital spending is reviving. The employment problem remains harder because so much of the new capital is going into sectors that employ relatively few people after construction. A broader investment cycle will need stronger participation from industries that can hire at scale.