Private investments key driver for growth: CEC Subramanian

The government has a well-thought-out agenda for reforms to beat current slowdown in the economy which is more cyclical than structural in nature, Chief Economic Advisor Krishnamurthy Subramanian said on Monday.

"The steps we are taking, like the corporate tax rate cut, are intended to create a more favourable environment for investments that are required for sustained growth," he said while speaking at the FICCI Young Leaders Summit.

"Private investment is the key driver of economic growth and consumption is a force multiplier," said Subramanian adding that the current slowdown is a lot more on the cyclical side.

"Needless to say that there is a slowdown. But you estimate whether it is cyclical or structural by estimating the potential growth rate of the economy. If the growth potential has changed because of some structural aspects of the economy, then you can say that the slowdown is structural."

Subramanian said there has been no change in the demographics, demand and the ability of companies to supply things. "The government is now doing a lot of reforms, and reforms enhance the productivity of the economy. We are taking all the steps that are necessary," he said.

Subramanian also talked about the importance of treating data as a public good. "Data is of the people, by the people, and hence should be for the people. The government should also promote the use of soft infrastructure like data infrastructure, he said.

"High-quality data is extremely important for machines to learn well and make predictions about the right business decisions," said Subramanian.

He also highlighted that technology has been changing the nature of jobs for long and the government must support re-training of people to learn new skills.

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