While striving for 8% growth on a sustained basis, India should focus as much as possible on domestic drivers of growth given global uncertainties, chief economic adviser V. Anantha Nageswaran told Prasanta Sahu in an interview. The governments should be examining whether the use of social media below 16 years should be banned given the adverse impact on the mental health of the youth, he added.
You have suggested a host deregulation to unleash the animal spirits. Are we going to see a slew of measures in this direction?
I have given my proposals that are not just applicable to the Union government. My preface also makes it very clear it’s applicable to governments across the system. So, who will act on it, when and what, speed, etc. is not for me to determine.
There is a big lag often between policy-making and implementation, which undermines the utility of the policies…
That is one part of the situation. But it’s also true that sometimes you may have rules and regulations and laws and practices that were created for a different era, different context, and we could change them also. So, it’s not just implementation. It’s also a question of looking at whether some of the laws, policies, rules, regulations and practices continue to remain relevant or not, and the unintended consequence that they might have. Sometimes implementation issues arise only if a particular law or rule is in place. If it is not necessary, and can be removed, then the question of implementation does not arise. So, both problems may exist at the same time.
The Survey talks about the need to grow around 8% for a decade or two to achieve Viksit Bharat dreams. By when do you think India could break into this phase of growth from around 6.5% now and how feasible it is?
I think that’s difficult to say because the global environment is unpredictable. It is evolving as we speak. These are not something that is conducive to modelling, basically. So, we cannot be very precise about these things, and we need to take advantage of opportunities as they arise in the external environment, be the investments or trade flows. So right now, we need to focus as much as possible on domestic drivers of growth, and that is what the Survey attempts to do.
What is the nominal GDP growth do you expect for FY26?
Given the projection that we have, I think the nominal GDP growth should be somewhere between 10 and 10.5%.
Given that private investment has been a mixed bag, do you think more areas should be actively promoted under PPP and roll out the next phase of National Monetization Pipeline?
That’s a possibility. But private sector capital formation need not necessarily have to wait for that. In fact, private sector investment and capital formation are something they can actually generate themselves, if firms were to relook at their compensation and hiring practices. That, in turn, can generate income growth and demand in the hands of households, which in turn can lead to a need for higher capacity and investment by the private sector.
Given the importance of the mental health of youth on the future of economic growth, do you think the government should ban the use of social media by children below 16 years like in Australia?
I think it is something that we should be examining and seeing whether that will be a necessary step. But I think at the moment, I understand that in some states, schools are already taking that step. But it is also not something that only policy can achieve. We can also be a conscious choice made by schools and parents, etc.
As far as the need to increase wages by corporations in tandem with the rise in their income is concerned, should the government nudge only, or take affirmative action?
I think we have done that in the July budget. We incentivised hiring. It’s too early to judge their impact. Whether the government needs to take specific actions of carrot and stick to induce them to hire, would be problematic in some sense. I think if the corporate sector sees weak aggregate demand and is able to connect its hiring and compensation practices to the weak aggregate demand, and it will take action themselves.