Indian economy more likely to be resilient amid global headwinds: CEA Nageswaran

New Delhi: The Indian economy is more likely to be resilient rather than becoming more vulnerable, Dr V Anantha Nageswaran, Chief Economic Adviser, said on Tuesday, citing strong bank credit growth, robust GST collections and healthy corporate and banking sector balance sheets.

Nageswaran told industry leaders at Assocham’s ‘Managing Committee Meeting and Special Session’ that while the resumption of hostilities in West Asia and rising interest rates across major economies, including a 10-year US Treasury yield of 5.02 per cent, had reintroduced volatility after a period of relative calm between March and July, India entered this phase of uncertainty from a position of strength.

He noted the country's recent sovereign rating upgrade to A- and successful mobilisation of $137 billion through foreign exchange deposit swaps and external commercial borrowings, alongside high-frequency indicators such as vehicle sales, e-way bill generation and export growth, as evidence of sustained economic momentum.

"This is a period of churn and this is an inflection point, and therefore what served us very well in the first 45 years since independence and then the next 30 years in the liberalisation era, both of these things may not necessarily be adequate for the next 25 years. We need to raise our game in multiple respects," Dr. Nageswaran said.

He added that individuals and households too would need to think about their mental, physical and emotional wellbeing, and that youngsters should stay open to trade skills rather than only conventional education paths as AI reshapes employment patterns.

“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,” said the CEA.

The policy, he cautioned, could not carry the economy alone.

“Policy will play its part but policy cannot be the only instrument that drives the economy forward,” he said, adding that the government would "continue to remain growth supportive, maintain macroeconomic stability and pursue deregulation and ease of doing business both for small and large enterprises."

The virtual session was attended by Nirmal K. Minda, President, Assocham; Past Presidents of the Chamber; senior members of the Secretariat; Council Chairs and Co-Chairs; sectoral leaders; and heads of member organisations across ASSOCHAM's network of industries.

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