There's an opportunity and need for raising share of manufacturing in economy: Chief economic advisor

"As India progresses from being the tenth largest to the fifth largest economy, aspirations also rise along with such key milestones. It is important to recognise these aspirations and strive to meet them for a better standard of living," he stated further.

Elaborating on some of India's key priority areas for achieving developed nation status, Dr. Nageswaran stated that improvements in human resource development are critical for achieving higher economic growth prospects. He also emphasised the importance of cities as ecosystems for attracting talent and stated that as cities play a catalytic role in fostering entrepreneurship, innovation and creativity, it is critical to convert India's Tier 2 and Tier 3 cities into engines of growth. Improving learning outcomes, preparing the country's youth for adopting AI, as focusing on the physical health of the youth cohort were also key focus areas, he added.

The creation of a 'Mittlestand' or a vibrant small and medium enterprises sector is imperative, stated Dr. Nageswaran. He highlighted the importance of deregulation or a lighter compliance burden for MSMEs in this regard. At the same time, there is a need to address factors of production such as land and labour markets and the need to make power generation and distribution economically viable for a faster energy transition, he observed.

Dr Nageswaran added that as various challenges emanate from geopolitical fragmentation and climate change, there is a need to focus on dialogue and consensus building with all relevant stakeholders for implementing next-generation reforms. He also emphasised the importance of macroeconomic stability and the criticality of prudent and sustainable general government finance for improved credit ratings as key aspects, especially at a time when geopolitical risks are at an all time high.

As India charts its growth prospects, the global environment cannot be taken for granted, stated Dr. Nageswaran. Taking several examples of global risks, such as increasing geopolitical fragmentation and uncertainty, the impact of US fiscal policy and interest rates, the ubiquitous presence of China in global manufacturing, and global financial stability, among others, he emphasised that India needs to find ways to address these challenges. He further added that the government cannot address these challenges alone and support from the private sector would be critical for society to advance further.

Dr. Nageswaran also emphasised the need to accept social responsibility for many of our innovations, including the impact of AI. He reiterated that Corporate Social Responsibility is not separate from corporate responsibility, and the need for taking meaningful and concrete actions across all areas is critical for co-creating the future responsibly. (ANI)