A small group of states attracts a big share of new projects, while large parts of the country draw relatively little capital. Targeted public investment in lagging states, especially in power, logistics and infrastructure, is the most effective tool to correct this imbalance, explain KJ Joseph & Kiran Kumar Kakarlapudi l Where India stands today on investment AT CURRENT INVESTMENT rates, India can likely sustain growth of 6–7%. Achieving growth of 8% or more for the next two decades which is necessary for reaching developed-economy status would require both higher investment and a much wider spread of private capital across sectors and states. In recent years, capital expenditure has picked up, led by the central government’s infrastructure push and reinforced by measures to encourage states to raise their own capital spending, including nearly Rs 10 lakh crore in interest-free loans for state capital expenditure (capex).