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Informist, Thursday, Dec. 12, 2024

 

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--CEA: Not keeping pace with energy transitioning to drag econ growth 
--CEA: Need to ensure energy transition efforts are in India's interest 
--CEA: Need to keep an overarching focus on energy transition 
--CEA: Creating 8 mln jobs per year a key challenge 
--CEA:Must ensure digital public infra data doesn't compromise on security 
--CEA: Have to double down domestic efforts for higher growth 
--CEA: Supply-chain disruption, trade uncertainty to persist going ahead 
--CEA: Exogenous pressures are not going to be temporary 
--CEA: Private sector beginning to deploy capital 
--CEA: On track to achieve 6.5-7.0% growth FY25 
--CONTEXT: CEA Nageswaran speaking at CII Global Econ Policy Forum 
--CEA: Jul-Sept GDP growth print to be revised up on more updated data
 

 

NEW DELHI - While India, as an emerging market economy, has benefitted from the world economy opening up, giving impetus to Indian exports, it is now time to double down on domestic efforts to strengthen manufacturing and private capital formation to drive the India growth story, Chief Economic Adviser V. Anantha Nageswaran said on Thursday. 

 

Issues of geopolitics are "not temporary any more" and supply-side disruptions and trade uncertainties are here to persist in the future, Nageswaran said, while speaking at the Confederation of Indian Industry's Global Economic Policy Forum 2024. In this context, it is important to improve domestic investments, which have been on the rise. 

 

In a presentation, the chief economic adviser detailed that as per the provisional estimates for 2023-24 (Apr-Mar), the share of private final consumption expenditure in nominal GDP growth was 60.3%, followed by gross fixed capital formation at 30.8%, and exports at 21.9%. "The private sector is beginning to deploy capital," Nageswaran said. 

 

While people in the corridors of power continue to say that the private sector has taken the baton of driving capital expenditure, data continues to be skewed. In the recent past, India's GDP growth has mainly been driven by government spending.

 

Nageswaran's comments on a thrust in domestic activity come at a time when the Indian economy expanded much lower than anticipated in Jul-Sept because of substantial deceleration in industrial growth. In the September quarter, industrial growth fell because of subdued performance of manufacturing companies, contraction in mining activity, and lower electricity demand.

 

Data from the statistics ministry showed that GDP growth in Jul-Sept fell to a seven-quarter low of 5.4% from 6.7% a quarter ago. Nageswaran reiterated on Thursday that there was a possibility that the Jul-Sept GDP growth print could be revised upwards based on updated data. He also said that irrespective of the slump in the second quarter, India was on track to achieve 6.5-7.0% GDP growth in the current financial year ending March, as there was a pickup in specific economic areas. 

 

In the endeavour to improve domestic conditions, creating 8 million jobs every year remains a priority and an important challenge for the government, Nageswaran said. However, this wasn't an easy task owing to the skilling gap, he said, while listing this as one of the five policy emphasis areas for the medium term. 

 

The other four priorities are making the agriculture sector productive and resilient, promoting MSMEs and manufacturing industries, addressing climate change while ensuring energy security, and encouraging innovation. On the last point, Nageswaran said the government has done enough work on promoting digital public infrastructure, but there is scope to do more. He also said that it has to be ensured that digital public infrastructure data does not compromise on security. 

 

On climate change, the chief economic adviser said India needs to keep up with the energy transition happening globally, as falling behind would be a drag on economic growth. In a report in September, Moody's Ratings had said that India's fiscal strength might weaken materially if the government completely shoulders the investment burden needed to close the gap on climate investment. Instead, it should involve the private sector to mitigate the impact on the sovereign balance sheet, it had said. 

 

Nageswaran also said that the government needs to ensure that energy transition efforts are in India's interest. "Need to keep an overarching focus on energy transition," he said.  End

 

Reported by Priyasmita Dutta and Krity Ambey

Edited by Avishek Dutta

 

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