NewKerala.com

Strong Manufacturing Can Push India's GDP Growth Above 7%: CEA Nageswaran

Chief Economic Adviser V. Anantha Nageswaran stated that a strong manufacturing sector could elevate India's medium-term GDP growth to 7.5-8%, surpassing the 7% projected in the Economic Survey. He emphasized that boosting manufacturing and exports would reduce the current account deficit and strengthen the rupee, noting that currency depreciation is a global trend for deficit countries. Nageswaran argued that strategic resilience and becoming indispensable to global supply chains are crucial, while industry protection must be conditional on competitiveness and export performance. He also highlighted the robust health of India's banking sector and broad-based domestic consumption as key pillars underpinning economic growth.

Key Points: India's GDP Growth Can Exceed 7% with Strong Manufacturing

  • Manufacturing can lift GDP growth above 7%
  • Exports key to reducing current account deficit
  • Strategic resilience needed in global supply chains
  • Protection for industry must be linked to competitiveness
  • Banking sector strength supports economic momentum
2 min read

Strong manufacturing sector can boost India's GDP growth above 7 per cent: Nageswaran

CEA V. Anantha Nageswaran says a robust manufacturing sector can boost India's medium-term GDP growth to 7.5-8%, strengthen the rupee, and cut the current account deficit.

"A strong manufacturing sector can push India's medium-term economic growth to 7.5 or 8 per cent - V. Anantha Nageswaran"

New Delhi, Jan 29

A strong manufacturing sector can push India's medium-term economic growth to 7.5 or 8 per cent, higher than the 7 per cent projected in the Economic Survey, Chief Economic Adviser V. Anantha Nageswaran said on Thursday.

Addressing the media after the tabling of the Economic Survey in the Parliament, the CEA said that a strong manufacturing sector, which pushes up exports, would also reduce the current account deficit and bolster the rupee.

He also said that the sector is not flashing any warning signal at present, as India's foreign exchange position is robust and allayed fears over the depreciation in the rupee.

Nageswaran said that currency depreciation is not particular to India, as all countries with current account deficits were seeing a weakening of their currencies.

He pointed out that all countries, such as Switzerland, Japan, South Korea, and Singapore, that were not witnessing a weakening in their currencies also have a strong manufacturing base, which was boosting their exports.

Nageswaran said it was imperative for India to boost its manufacturing sector to sustain exports, which would eventually lead to a surplus in the current account instead of a deficit, which, in turn, would result in a stronger rupee.

He highlighted that the government's emphasis on indigenisation and swadeshi is important to boost manufacturing in the country. However, protection to the industry must be given on the condition that it turns competitive and boosts exports. Protection cannot be extended indefinitely, but should be linked to productivity and exports on the part of industry, he added.

Nageswaran said that India must aim for "strategic resilience", which enables the country to withstand a breakdown in the world economy. At the same time, this strategic resilience should make India an indispensable part of the global supply chain.

He also highlighted that India's banking sector has become much stronger in recent years, with NPAs at multi-decadal lows and credit to the commercial sector registering a robust 29 per cent year-on-year growth.

He contended that domestic demand continues to underpin India's economic growth amid global uncertainties. This strength in consumption reflects a supportive macroeconomic environment, characterised by low inflation, stable employment conditions, and rising real purchasing power. Moreover, steady rural consumption, bolstered by strong agricultural performance, and the gradual improvement in urban consumption, aided by the rationalisation of direct and indirect taxes, reaffirm that the momentum in consumption demand is broad-based.

- IANS

Share this article:

Reader Comments

P
Priya S
Good points, but I hope this isn't just talk. We need to see more support for MSMEs on the ground. Easier credit, less red tape, and better infrastructure in tier-2/3 cities are key for manufacturing to truly take off.
R
Rohit P
Strong rupee from strong exports sounds great. But let's be real, we also need to focus on quality and innovation, not just quantity. Becoming an indispensable part of the global chain means we have to offer something unique.
S
Sarah B
As someone working in the export sector, the emphasis on strategic resilience is spot on. The world is looking to diversify supply chains away from China. This is India's decade to capture that shift, but execution is everything.
V
Vikram M
The part about rural consumption is heartening. A strong agricultural base and manufacturing can create a powerful virtuous cycle for the economy. More jobs in small towns will reduce migration pressure on cities.
M
Michael C
Respectfully, while the theory is sound, I'm concerned about the "indigenisation and swadeshi" emphasis. In a globalized world, being protectionist can backfire. The goal should be integration and competitiveness, not isolation.
K
Kavya N
True growth will come when manufacturing provides stable

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50