Deregulation a big theme for upcoming Economic Survey, says CEA Nageswaran

Chief Economic Advisor V Anantha Nageswaran

Chief economic advisor V Anantha Nageswaran on December 5 revealed that deregulation is going to be major theme of the upcoming Economic Survey.

Nageswaran said that deregulation is required at the state and local governments level to boost the participation of female workforce.

“To increase female labour participation, there has to be deregulation in states and local governments. Deregulation or letting go is the big theme for the coming Economic Survey,” he said at at Assocham’s Bharat@100 Summit.

In many states, women are still excluded from participating in the workforce across several sectors deemed risky. This needs to change, especially in an era where women are breaking barriers and flying fighter jets, he remarked.

He also cautioned against ‘overinterpreting’ the sharp fall in gross domestic product (GDP) growth in the second quarter of the current financial year as India’s growth story “remains intact”.

“In view of Q2 GDP of 5.4 percent, we should not throw the baby out with the bathwater, as underlying growth story remains intact,” the CEA said at Assocham’s Bharat@100 Summit ‘Fuelling Bharat's Global Rise’.

The top economic advisor said that fiscal incentives can go only so far for job creation and it is 'necessary' for corporates to find a balance between labour and technological intensive growth.

"State and central government have a lot to do for small enterprises on deregulation," the CEA added.

Moreover, Nageswaran argued that India needs to become synonymous with quality and will have to abandon the 'Jugaad' approach. "Need to make India a by word for quality, we need to make the transition. ...need to abandon recourse to jugaad, its sub optimal approach. (It is) good to handle crisis with innovative band aid solutions, (but) approach to quality has to be there whether a big or small enterprise."

Significantly, Nageswaran highlighted that consumption growth has been 'steady' and its share in GDP is "above 60% in last several quarters".

"Urban consumption has sagged a little bit, could be temporary because of monsoon issues", he added.

The economist reasoned that contractual labour by corporates "exert downward pressure on urban consumption". He further said that the wage growth in different sectors for contractual employees has not kept up with inflation, according to a report. "For long-term consumption growth, need focus on employment, income growth and spending growth."