23 AUG,2021 | MEDC
For enhancing investor confidence in the economy, animal spirits do matter. The government’s emphasis on private investment and growth is commendable, but it will not come about automatically. Keynes defined animal spirits as a spontaneous urge to action rather than inaction. Animal spirits thrive on confidence and faith in the system. Thus, if India wants to boost the animal spirits of its entrepreneurial community so that they invest more in the country, it will have to take more decisive measures to instil confidence and foster faith in the system. Mere exhortations about the rising ease of doing business in the system are unlikely to work unless they are backed up by commensurate ground-level realities. India has world-class entrepreneurial talent, and it will be a pity if policymakers are unable to suitably harness their talent by not providing them the playing field they need to unleash their innate potential. This includes infrastructure development, regulatory changes, and the sustained reduction of transaction costs in the economy.
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