The concept of crowding out private sector refers to government's increased role in an economy, displacing private investments. This can occur when heavy government borrowing competes with private businesses for available funds, driving up interest rates. As a result, private sector investments may decline due to higher borrowing costs. This phenomenon can limit the growth and innovation potential of businesses, hampering overall economic development. It is essential for policymakers to strike a balance between government intervention and fostering a conducive environment for private sector growth to ensure sustainable economic progress and prosperity for all stakeholders.