Chief Economic Advisor (CEA) V. Ananth Nageswaran on Thursday stressed the need for caution on energy transition and said it should be done without compromising on growth.
“We need to do it carefully so that in the name of managing energy transition and fighting climate change, we do not throw out economic growth with the bathwater. Without growth, there are no resources to invest in climate change management,” he said.
Speaking at the Global Economic Policy Forum organised by the CII here, citing the negative impact, he said Europe is facing an economic slowdown as industrial power prices have risen sharply, due to the focus on renewable energy and energy transition.
He said this is not just a political challenge but also an economic one, affecting not only India but the entire global South.
Allaying concerns of a slowdown, he said India is on track to achieve 6.5-7 per cent GDP growth in the current fiscal as indicated in the Economic Survey.
However, he said that the uncertain global economic environment is a permanent challenge for India, and domestic efforts need to be redoubled to overcome uncertainties.
In this effort to improve domestic conditions, Nageswaran also said that creating 8 million jobs every year is a priority and a key challenge for the government. This is not an easy task due to the skill gap, he said.
He also stressed on the importance of strengthening capital formation and expressed optimism that private sector participation is expected to increase in the next five years due to improving balance sheets and profitability.
As per the provisional estimates for 2023-24, private final consumption expenditure contributed 60.3 per cent to nominal GDP growth, followed by gross fixed capital formation at 30.8 per cent and exports at 21.9 per cent, he said, adding that the private sector is starting to utilise capital.
Creating productive employment, addressing the skill gap challenge, harnessing the full potential of the agriculture sector, boosting India's manufacturing and MSME growth through deregulation, balancing rural-urban development will be important driving factors to make India a developing India by 2047, he said.
Besides, by continuously supporting high-quality capital expenditure and making 'Make in India' synonymous with high quality through innovations, research and development and quality consciousness, the country will become a developed nation, Nageshwaran added.
He also stressed on the need to address the growing concerns about mental health among India's youth, which has been worsened by screen addiction, sedentary lifestyle and consumption of ultra-processed food.
"It is not just the responsibility of the government, but also the responsibility of society and the private sector. If India has to reap the benefits of the demographic dividend, Indians must not only be physically healthy but also mentally healthy", he said.
He said that 8 million jobs need to be created in the next 10-20 years which is no small challenge, adding that these jobs should be created with a decent living wage.
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