- Monday, February 24, 2025
V Anantha Nageswaran pointed out that many crucial reforms are within the purview of state governments, which could expedite their implementation.
By: Shubham Ghosh
RESULTS of India’s just concluded general election, which saw prime minister Narendra Modi securing a record third term with a narrower victory margin, are anticipated to pave the way for productive reforms, according to the country’s chief economic adviser (CEC), Reuters reported.
The underlying factors driving economic growth are largely unaffected by government policies.
The outcome has necessitated Modi’s Hindu nationalist party to seek coalition partners for governance since it did not get a majority on its own, unlike in the last two elections.
Following the election results that came out on Tuesday (4), there were concerns among investors that significant economic reforms might be delayed, leading to a decline in the stock markets. However, there was a partial recovery in market confidence the next day.
V Anantha Nageswaran, the government’s CEC, pointed out that many crucial reforms are within the purview of state governments, which could expedite their implementation.
Read: US-India business body congratulates Modi on election victory
“In some cases the responsibility is disproportionately on state governments, sub-national governments,” he said while speaking at an investors’ conference hosted by Nomura in Singapore.
“I would even say that the election outcome increases the probability of some of these factor market reforms happening, rather than lowering it, because it creates avenues for dialogue and consensus building,” he was quoted as saying.
The factor market refers to land, energy, labour and other inputs in economic production.
Read: Coalition era returns in India politics: Can Modi do a Vajpayee?
Nageswaran took on his role in 2022 and holds a prominent position as one of the government’s primary economic policy advisers.
Furthermore, he is responsible for crafting India’s economic survey, a pivotal document signaling the government’s policy stance and laying the groundwork for the budget.
According to him, the next government will deliver “policy continuity with some change.” He, however, did not detail any change.
“The supply side infrastructure improvements that have happened – they are for real and they will continue,” Nageswaran said.
Future growth also draws on the health of the banking system and corporate sector, he added.
“Both are going to be important drivers, not so much government policy, and those have not been affected by the election outcome.”
(With Reuters inputs)
