India’s Chief Economic Adviser V Anantha Nageswaran presented the annual Economic Survey. The survey projected a GDP growth rate of 6.3% to 6.8% for the fiscal year starting on April 1, 2025. While this growth is positive, it is insufficient for India to reach developed nation status. The survey emphasised the need for reforms in various sectors to stimulate further economic development.
Chief Economic Adviser Profile
V Anantha Nageswaran has been serving as Chief Economic Adviser since January 2022. His term has been extended until March 2027. He is an alumnus of the Indian Institute of Management Ahmedabad. Prior to this role, he was a part-time member of the Economic Advisory Council to the Prime Minister from 2019 to 2021. Nageswaran has also held academic positions as dean of the IFMR Graduate School of Business and as a visiting professor at Krea University.
Annual Economic Survey
The Economic Survey is document that outlines the current state of the Indian economy. It serves as a precursor to the Union Budget. This year’s survey brought into light a projected GDP growth of 6.3% to 6.8%. It also pointed out that this growth rate is below the threshold needed for India to attain developed nation status. The survey calls for urgent reforms in key sectors to enhance economic performance.
Importance of Economic Reforms
The Economic Survey stresses the necessity of deregulation and reforms in land and labour sectors. Deregulation can lead to increased investment and efficiency. Reforms in land and labour laws could facilitate easier business operations and attract foreign investments. These changes are essential for sustaining higher growth rates.
Challenges to Growth
Despite the positive projections, several challenges remain. Global economic conditions, inflation, and domestic policy hurdles could hinder growth. Additionally, achieving a balance between economic growth and social equity is crucial. The government must navigate these challenges to realise the potential growth forecasted in the survey.
Future Outlook
The government’s approach to implementing the recommended reforms will be critical. If successful, these initiatives could lead to a more robust economy. The focus must remain on creating a conducive environment for businesses and improving infrastructure. Continued monitoring of economic indicators will be necessary to adjust policies as needed.
Questions for UPSC:
- Discuss the significance of economic reforms in India’s journey towards developed nation status.
- Critically examine the role of the Chief Economic Adviser in shaping India’s economic policies.
- Explain the impact of global economic conditions on India’s GDP growth projections.
- With suitable examples, discuss the challenges faced by India in achieving sustainable economic growth.
Answer Hints:
1. Discuss the significance of economic reforms in India’s journey towards developed nation status.
- Economic reforms are essential for increasing efficiency and productivity in key sectors.
- Deregulation can attract foreign investment and improve the business climate.
- Reforms in land and labor laws can facilitate easier business operations and job creation.
- Achieving developed nation status requires sustained high growth rates, necessitating structural changes.
- Successful reforms can lead to improved infrastructure and enhance overall economic stability.
2. Critically examine the role of the Chief Economic Adviser in shaping India’s economic policies.
- The Chief Economic Adviser (CEA) provides critical insights and forecasts that guide government policy decisions.
- The CEA’s annual Economic Survey sets the tone for economic planning and budgetary allocations.
- As a member of advisory councils, the CEA influences high-level economic discussions and strategies.
- The CEA’s academic background contributes to evidence-based policy formulation and recommendations.
- By analyzing economic trends, the CEA helps identify key areas needing reform and investment.
3. Explain the impact of global economic conditions on India’s GDP growth projections.
- Global economic trends influence trade dynamics, affecting India’s export and import balances.
- International inflation rates can impact domestic prices and consumer spending in India.
- Economic slowdowns in major economies can reduce demand for Indian goods and services.
- Foreign investment flows are often contingent on global market stability and investor confidence.
- Geopolitical tensions can disrupt supply chains and impact economic growth forecasts.
4. With suitable examples, discuss the challenges faced by India in achieving sustainable economic growth.
- High inflation rates can erode purchasing power and consumer confidence, hindering growth.
- Infrastructure deficits, such as inadequate transportation and energy supply, limit economic expansion.
- Social inequities can lead to unrest and instability, affecting overall economic progress.
- Regulatory hurdles can deter investment and complicate business operations.
- Environmental challenges, including climate change, pose risks to agriculture and livelihoods.
