Salary growth in India has trailed rise in profitability, AI to make it worse: CEA Anantha Nageswaran

CEA Anantha Nageswaran

India's Chief Economic Advisor (CEA) Anantha Nageswaran said that the rise in salaries and wages in India have trailed profitability growth. The advent of artificial intelligence will likely make it worse, he added.

"If you look at the track record of India's top 25 manufacturing companies or the entire private sector in general, it is true that salaries and wages growth have substantially trailed growth in profitability. This will become even more acute due to the impact of AI," he said while speaking at Network18 Reforms Reloaded 2025 summit in Delhi.

Nageswaran suggested that Indian industry needs to ramp up its research and development.

CEA on Trump's recent move on H1-B visas:

On being asked about US President Donald Trump's recent fee hike for H-1B visa, the CEA said that crisis is the only way we will relook and re-examine business model. We will look back three-four years from now and say, this was actually a good thing that happened as we have now diversified and grown, although it may look very uncertain now," he said.

'GDP growth will tend towards upper end of 6.3-6.8% range in FY6'

India's FY26 GDP growth will tend towards the upper end of 6.3-6.8 percent range in FY26, following the GST 2.0 reforms which came effect from today, the CEA added.

He was referring to the GDP growth estimate mentioned in the Economic Survey tabled by finance minister Nirmala Sitharaman on January 31 this year.

GST rate cuts, income tax relief to have multiplier effect on GDP numbers'

"The GST 2.0 is a very significant landmark reform. I am very confident that it will provide a very significant boost to domestic demand. Coming on top to the indirect taxes are the concessions and relief announced as part of the Union Budget. Taking a multiplier effect, these will quite definitely boost the GDP numbers," he said.

Also read: Reforms Reloaded Live Updates