Analyzing Indian economy and corporate profits from this perspective ( basically the levy kalecki equation) in the past 30 years, we can find basically 5 different phases (1/n) https://twitter.com/Me_Predictor/status/1344299852780343296

First phase 1994-97:the first real pvt capex boom. We also saw good amount of household investments ( real estate booming) in this period. Govt spending was moderate. Household Consumption may not have been that great but improving from a low base. Corporate profits improved

External sector was also reasonably well balanced

1997-2000:
Here investments plateaued , led by very similar conditions to recently - the twin balance sheet problem, NBFC , high real rates etc External environment also wasn't great with Asian crisis et al

Govt expenditure was mixed, and perhaps more focused on consumption ( pensions, salary etc ) and not really investment focused

But it was also the time of the IT boom.

Overall corporate profits were tepid. While investment were poor, IT exports helped though....

More on the household income side. With moderate consumption, household savings were also reasonable

2000- early 03: The IT bubble burst. Corporate investments continued to be very tepid. Consumption also got impacted as income growth in IT stalled.

However this was the period when govt investment turned bigger with the big infra focus.

And as households saved more being cautious, household investments also improved and low interest rates set the base for the first mortgage boom.

These two factors eventually set the stage along with a turn in the global economy for the big boom that followed in 2003-08

2003-08: the global economy improved and in the initial stages, net exports helped household and corporate income. Eventually corporate savings were reinvested, household investments continued to grow at a steady clip and foreign investments were robust.

Households did save more, but they also did consume more as overall incomes improved. The external sector did move from surplus to deficit but again it was due to both exports and imports increasing similar to the dynamics on household savings and consumption

2009-13 : As I tweeted few days back, all three of corporate investment, household investment and govt spending were strongly positive during this period. However while household incomes did improve atleast in nominal terms, corporate profits stayed tepid as....

A large part simply leaked out through the massive current account deficits. This despite both govt and households dis saving. Foreign investments after being very strong initially post gfc were tepid post 2011 and eventually our FX reserves cratered

2014-18:
Here again corporate profits growth was very tepid and even negative. And not difficult to understand why. After a mal investment cycle, corporates did not invest more , the real estate boom had stopped and households did not invest either. The govt did to some extent

But not quite enough.

What saved the day was the sharp positive external supply shock as oil prices declined. Thus despite households income in nominal terms tapering off, they were able to spend on more. And they also did spend more even in relative terms, partly aided by

Easy availability of consumer loans.

Paradoxically, despite consumption being much more tepid than say 2009-12, it did turn out to be the single biggest driver of growth during this period!

2018-20: As the nbfc bubble burst, and availability of credit also tapered, the one big driver consumption also cratered. And so did household investments. Corporates who otherwise had deleveraged and were in a better position to invest, also held back due to

Weaker demand and continuing problems in the financial sector. The world economy wasn't doing great either, so neither did exports help particularly. The govt spending did go up in relative terms but nowhere close to enough

No wonder this period seemed the worst be it from a corporate profit , household incomes or even gdp perspective in the past 25 years!

Now for the current covid period and beyond ( interestingly we see starting to see some improvement in corporate profits already):

1. We are seeing govt spending or govt dissavings increase
2. Exports atleast on the IT offshoring side having a new lease of life

Now some crystal gazing,
Rich households whose incomes have improved and with forced savings will eventually spend more, just atleast as replacement demand in sections such as consumer durables and

also invest more as they transform their financial savings into physical savings ( real estate).

This combination of improved external sector, higher government investments and eventually higher consumption and investment by households will set the stage for improved corporate profits similar to the trend seen at the fag end of the 2000-03 cycle

With their balance sheet in good shape this should eventually translate to a new capex cycle hopefully in a year or two!

So keeping in mind the framework

Corp Profits+ household incomes= investment + govt dis- savings + rest of world dis savings + household consumption + (dividends) ( let's ignore the last part for now)

So to summarize the key phases:
1994-1997: driven by household and private investments
1997-2000 : to some extent dissavings of rest of world ( I.e services exports) and foreign investments
2001-03: Govt and household investments

2004-08 : A combination of all! ( though on a net basis external sector moved from positive to negative)
2009-13: Driven by even more of all though capacity constraint plus inefficiency meant leakage in external sector was HUGE . And in real terms chipped away by inflation

2014-18: counter intuitively driven by consumption!
2018-20: right hand side of the equation bad on really all fronts though mildly cushioned by govt spending

2021 onwards: ?????