‘Capital expenditure changed extensively’- Chief Economic Advisor V Ananth Nageshwaran

New Delhi| In the current financial year, the Indian economy can achieve growth at the rate of 6.5 to 7 percent on a stable basis. Central Government’s Chief Economic Advisor V Ananth Nageshwaran made this estimate on Friday. He said that considering the current global situation, this growth rate is commendable.

Speaking at an event organized by Bengal Chamber of Commerce and Industries (BCCI), CEA Nagareswaran said that while the real growth rate is expected to be 6.5 percent, inflation can reach an adjusted growth rate i.e. nominal growth rate of 11 percent. The Chief Economic Advisor said that the world is facing medium-term uncertainties. Global trade is slowing down. But, in the case of India the situation is positive.

The recovery of the country’s economy after the Corona period has strengthened due to the balanced fiscal and monetary policies adopted by the government. Nageswaran said, “The recovery of the economy after Covid has been strengthened due to prudent macroeconomic management”. It has been the foundation for economic growth with sustainability”. Nageswaran said there is no reduction in the country’s current account balance due to the strengthening of domestic financial markets and the banking system.

“Macro indicators indicate stability”, he said. Capital expenditure has changed on a large scale. External debt has decreased as a proportion of GDP and retail inflation has also declined He said that all these indicators guarantee the betterment of the country’s credit system. According to the Chief Economic Advisor, the supply capacity of the economy has increased, which has helped in controlling inflation.

He said that all positive signals will prove helpful in maintaining stable growth rate in the coming many years. However, the CEA also said that India needs to find domestic sources of growth. According to the Chief Economic Advisor to the Central Government, the country needs to generate productive employment, ensure food security, reduce regulatory barriers for MSMEs (small and medium industries) and ensure efficient allocation of financial resources.

Nageswaran said that MSME sector is the key to non-agricultural employment generation. Small and medium industries need to be transformed into large enterprises to enable them to absorb more labour. He said that there is a need for more participation of women in the workforce. For this, it is necessary to take safety and security measures at workplaces. On artificial intelligence (AI), Nageswaran said it could ultimately impact human labor. According to him, a balance has to be struck between technology and labor force keeping in mind social responsibilities.