 "Globalisation may be a thing of the past, says CEA V Anantha Nageswaran")
India needs to raise its game by relying on domestic drivers of growth through deregulation at a time when globalisation will no longer provide a tailwind, Chief Economic Advisor (CEA) V Anantha Nageswaran said on Friday.
Addressing a press conference on the Economic Survey 2024-25, Nageswaran told reporters, “Regulations disproportionately affect small businesses. Deregulation is not only about ease of doing business; it is also a pathway to employment.”
On the private sector’s role in nation building, Nageswaran highlighted the disparity between the profit and wage growth of companies. He said that achieving the status of a developed economy by 2047 will require a Socially Responsible Private Sector.
“Aligning profit growth with wage increases is essential for sustaining demand and supporting corporate revenue and profitability growth in the medium to long run,” Nageswaran added.
He asserted that the private sector needs to weigh the benefits of Artificial Intelligence against its social costs.
Highlighting the concentration risk of one country becoming the source of supply, the CEA said that the presence of China is pervasive and dominant in several high and medium tech areas.
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“China’s share (of global output) will probably be higher than the combined share of the next ten countries. It gives them a lot of strategic levers and advantages,” he said.
Nageswaran stressed that as nations calibrate towards domestic priorities, globalisation may be a thing of the past.
“The single-source concentration risk in several product areas exposes India to potential supply chain disruptions, price fluctuations and currency risks. India's task is cut out," he said.
The CEA said that the relative slowdown in the current GDP growth of India has to be seen in context of the decline in global real economic activity since 2023.
He said that India remains as the largest growing economy of the world and needed to maintain the minimum level of growth during global headwinds to achieve the Viksit Bharat goal.
“We can lift these baseline (growth) numbers which take into account the uncertainties,” Nageswaran said.
The survey has projected the Indian economy to grow between 6.3 and 6.8 per cent in the next financial year. Nageswaran said that while the growth numbers have not made any assumption on crude price outlook, no major upside risk to crude oil prices is expected in the near future.
While the CEA did not comment on the idea of a 90-hour workweek proposed by Larsen & Toubro (L&T) Chairman S N Subrahmanyan, he said that better relationships with managers and colleagues, an optimal workload, and a sense of pride and purpose at work significantly improve mental well-being. He added that poor mental health reduces the number of working days and overall productivity.