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Informist, Monday, Sept. 21, 2026

 

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--CEA: Growth must translate into rising wages, consumption 
--CONTEXT: CEA Nageswaran speaking at an event in Delhi 
--CEA: Entire manufacturing sector needs stronger hiring growth 
--CEA: Govt must focus on conditions for enterprise growth 
--CEA: To stay on current path in term of fisc mgmt 
--CEA: Uncertain oil prices outlook to remain a challenge 

 

NEW DELHI – The uncertainty around global oil prices will continue in the next financial year as well, Chief Economic Advisor V. Anantha Nageswaran said Monday. "...the challenges this year and the next year will continue to remain in terms of uncertain oil price and fertilisers etc." 

 

However, a prudent fiscal management has helped India get 7% average real growth rate post COVID-19, he said at AIMA's 53rd National Management Convention here. "We intend to stick to that (prudent fiscal management) and continue to also improve the quality of government expenditure," Nageswaran said. 

 

The escalation in the US-Iran war has led Brent crude oil prices to resurge to over $100 per barrel after it had moderated to around $71 per barrel level in early July. Currently, crude oil is priced at $101.96 per barrel. The war's impact can also be seen in government spending, as expenditure on major subsidies in the first four months of 2026-27 (Apr-Mar) rose 35.2% on year due to a surge in fertiliser subsidy outgo.

 

"There is a general increase and particularly higher level of bond yield increases for specific countries," Nageswaran said while answering a question on increasing number of global bond yields. "So, our job is to make sure that we continue to remain on the prudent part in terms of fiscal management and that is what we aim to do," he said. 

 

There is an increase in interest rates everywhere, but countries with a much higher public debt and deficit problem are the only ones who have faced the highest level of increase in bond yields, the chief economic advisor said. "While some amount of increase in bond yields in India, too, is inescapable when global bond yields increase," he said, adding, "We can limit the increase." 

 

The spread that the Indian bonds have over the US Treasury has compressed over the years, acting as a testament to the quality of fiscal consolidation India has pursued, Nageswaran said. "We will continue to stay on the track." He also emphasised the importance of prudent fiscal management. "Our job is to make sure that we continue to remain on the prudent part in terms of fiscal management and that is what we aim to do."

 

Strong profits, bouyant stock market, and a population that does not feel better off are some of the signs of growth without fairness, he said, terming them as "rich world's trap". "We in India should choose differently, and the onus is very much on the private sectors, listed and unlisted, to think about," he said. 

 

"If families are spending out of savings without any real growth in income, then we are closer to falling into the trap that rich countries have already fallen into ahead of us," the chief economic advisor said. "India has less margin for error compared to rich countries." 

 

He said the government must also focus on conditions to enable growth of enterprises. "Capital deserves a fair return...Honest way is to lower real cost, and some of the responsibility lies with the government. For example, energy must become cheaper because costly power is a tax on every factory in India," Nageswaran said. Cheaper land and more usable floor space will further support in lowering the cost of doing business without taking a single paisa from any worker, he said, adding, "That's how governments in the country help industry earn a fair return." 

 

Meanwhile, he emphasised the importance of hiring growth in the manufacturing sector. The chief economic advisor held that a healthy increase in wages and hiring was integral to strong manufacturing growth.

 

"Without rising wages, there is not enough domestic demand to justify making things at scale. Without hiring, the advantage of our young population becomes a source of concern. Without prompt payment, our suppliers remain too weak to move up on simple assembly towards design and components, which is the part of the chain where lasting profits actually sit. Without a strong manufacturing base, our ambitions will stay just that, ambitions. The chain runs in one direction and the starting point of the chain is fair pay and hiring," Nageswaran added.  End

 

US$1 = INR 95.81

 

Reported by Radhika Tiwari and Sagar Sen

Edited by Akul Nishant Akhoury

 

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