2026 · Q42
Which one of the following best explains the "crowding-in effect" observed in India?
General KnowledgeIndian Economy
- AReduction in private sector borrowing
- BPublic investment leading to increase in private investment
- CDecline in fiscal deficit
- DIncrease in imports due to higher demand
Explanation
The crowding-in effect refers to public investment stimulating higher private investment, as documented in India's recent capex-led growth story where government capital expenditure pulled in private capex. It is the opposite of crowding out. The answer is (B).