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Informist, Tuesday, Sept. 15, 2026

 

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--CEA: Youngsters must look for skill training given AI risks to employment 
--CEA: Pvt sector must invest, hire, pay well for econ growth 
--CEA: States undertaking deregulation activity seriously FY27 
--CEA: Don't expect food price increase to persist throughout FY27 
--CEA: Data shows economy retains strong momentum 
--CEA: Govt watching global uncertainties closely 
--CEA: Global uncertainties have made a comeback in the last 5 days 
--CEA: Confident fiscal deficit to be close to 4.3% of GDP FY27 

 

NEW DELHI – India is expected to sail through the recent reflux in global uncertainties due to its strong underlying economic momentum, although only time will tell the extent to which the country will succeed, Chief Economic Adviser to the government, V. Anantha Nageswaran, said Tuesday. "I will not say that the batting track or the pitch has become very bad to bat on...but definitely we can say that in the last five days, uncertainties have made a comeback," Nageswaran said at an event by the Associated Chambers of Commerce and Industry of India here.

 

India did successfully navigate the crisis from the war in West Asia between February and July, and clocked in a GDP growth of 7.8% in Apr-Jun, Nageswaran said. At the same time, the government stayed on its path of fiscal prudence and fiscal stability, he said. While there were concerns that India's fiscal deficit could slip to as much as 5% in 2026-27 (Apr-Mar), the fall in crude oil and fertiliser prices and a sharp improvement in the government's revenues gave the Centre confidence that the fiscal deficit could be closer to 4.3% in FY27, he added. 

 

The Union Budget had pegged the fiscal deficit for FY27 at 4.3% of GDP, or INR 16.96 trillion. The fiscal deficit target for FY27 will, however, be 4.5% of GDP, following the downward revision in India's nominal GDP in the new series with FY23 as the base year.

 

Going ahead, "there is no need to assume that it (economic path) will be a difficult one, although some circumstances might make it more difficult," he said. There are doubts whether China will be reducing its crude oil purchases once again or whether demand in general will come down so much that the increased disruption to oil supply can be compensated by much lower demand, he said. "We also don't know enough about what will happen to the bond yields in the world and the US monetary policy, etc," Nageswaran said.

 

The price of Brent crude oil and the dollar index rose Tuesday due to growing supply worries amid further escalation of the war in West Asia. The price of Brent crude oil rose almost 2% in early trade as concerns around energy supplies heightened after new ‌strikes on Saudi Arabian energy infrastructure and attacks on ships in West Asia. In the last five days, Brent crude oil prices have risen over $100 per barrel, the first time since May. 

 

The government is very aware of these developments and is therefore watching the situation closely and looking at how to respond depending on how things evolve from here, the government's top economist said. Our economy retains a lot of resilience and a lot of momentum, as seen in the high-frequency data, he said. "We saw that in the bank credit growth, export growth, GST collections, e-way bill and the sale of two-wheelers, three-wheelers, passenger and commercial vehicle data which we got from the Federation of Automobile Dealers Association," he said. 

 

To add to the strengths that will help India fight the recent resurgence in uncertainties, Nageswaran said monsoon volatility in India is now at a "manageable" level. "Agricultural output from the Kharif crop should be very good," he said. Given this, Nageswaran does not expect the increase in food prices in August, which was close to 6%, to persist as we go towards the end of the year. "So, by and large, my expectation is that while definitely the risk factors have resurfaced globally in the last five-six days, the Indian economy is more likely to be resilient rather than becoming more vulnerable."

 

India's favourable macroeconomic conditions are aided by the government's policies, which help in easing businesses' fears, including the deregulation push. Both the Centre and states are pursuing deregulation "very actively", and phase two of deregulation in states is underway this year, he said. 

 

"We will continue to pursue economic reforms, make it easier to do business, make it easier for people to live so that we can overcome this period of uncertainty, which of course can also be long and lasting given the nature of geopolitics and the complexity and supply chain weaponisation," Nageswaran said. The private sector must, however, know that policy will play its part, which will have to be complemented by the corporate sector. 

 

The chief economic adviser urged the private sector to invest, employ, and pay its employees well. All of these will have a larger impact on the economy, he added. With corporates increasingly deploying artificial intelligence, Nageswaran also urged the private sector to be imaginative and sensitive towards its usage and said AI must not be used to displace labour, but to complement productivity. India has a huge labour force, and AI must be a blessing, and not otherwise, he said. 

 

Households must also prepare for the technological shifts, Nageswaran said, adding that youngsters now must also train themselves with skill-based or trade-based training, rather than usual academic training, as the job market can change going ahead. This is not the first time the chief economic adviser has sounded caution over AI emerging as a threat to human capital.

 

In the Economic Survey for FY26, a team led by Nageswaran had said it was necessary for Indians to now also train themselves for jobs beyond the "white-collar" section, to focus on skill-based service areas that are unlikely to be touched by AI. The survey had also pitched for more responsible use of AI by large enterprises, urging them to exercise judgement before using it to cut costs.  End

 

Reported by Priyasmita Dutta

Edited by Shubhayan Bhattacharya

 

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