India’s economy has reached an “inflection point” and requires a fresh approach to policies that shaped its development over the last three decades, Chief Economic Advisor Anantha Nageswaran said on Tuesday.
Speaking at an event in New Delhi, Nageswaran said the strategies that supported India’s growth after independence may not be sufficient to address future challenges. He called for a broader transformation as the country prepares for the next phase of economic expansion.
“This is a period of churn and this is an inflection point,” Nageswaran said. He added that what worked for India since independence “may not necessarily be adequate for the next 25 years.”
“We need to raise our game in multiple respects.”
AI, skills and the future of employment
Nageswaran said India must develop a growth model suited to the artificial intelligence era by ensuring that technology strengthens workers instead of replacing them. He cautioned against adopting a highly capital-intensive approach followed by advanced economies.
“We have to find ways in which we use AI to complement rather than displace labor, because we are a large country,” he said.
He also highlighted the importance of vocational training and said young Indians should consider acquiring trade skills as AI transforms employment opportunities.
Private investment key to future growth
Despite global uncertainties, including geopolitical tensions and elevated crude oil prices, Nageswaran expressed confidence in India’s economic outlook. He pointed to strong bank credit growth, robust tax collections and healthy corporate and banking sector balance sheets as indicators of resilience.
India’s economy expanded 7.8% in the April-June quarter, reflecting continued momentum.
Nageswaran said the private sector will play a crucial role in sustaining growth by increasing investment, generating employment and supporting innovation.
“The private sector must invest, must hire and must compensate fairly and also invest in R&D because the next 20 years is going to be very different from the last 80 years post World War II,” he said.
