Deregulation will be a major focus of the Economic Survey 2024-25, says CEA V Anantha Nageswaran. The CEA stresses workforce reforms and wage growth to sustain India’s 6.5-7% growth forecast for FY25.
Deregulation: Pivotal to Economic Survey 2024-25
India’s Economic Survey 2024-25 will emphasize deregulation as a key strategy for economic progress, according to Chief Economic Advisor (CEA) V Anantha Nageswaran. The Survey, which will accompany the FY26 Union Budget, is expected to propose reforms aimed at reducing bureaucratic bottlenecks and fostering a business-friendly environment.
The CEA also reaffirmed India’s growth target of 6.5-7% for FY25 but cautioned that addressing workforce and wage issues is essential to sustain this momentum.
Workforce Informalization: A Growing Concern
Post-pandemic hiring trends have seen an increase in contractual employment, resulting in stagnant wages that fail to match inflation. Nageswaran termed this as “creeping informalization,” which has led to reduced purchasing power among employees, hampering domestic consumption.
For companies, these hiring practices may seem logical in the short term. However, they collectively exert downward pressure on demand, impacting long-term growth prospects.
Wage Reforms: Driving Consumption and Savings
The CEA underscored the urgent need for corporate wage adjustments to stimulate household consumption and boost savings. “Consumption cannot thrive without addressing the wage stagnation of the corporate workforce,” he stated, urging industries to adopt a sustainable approach to employment practices.
Why Deregulation Matters
Deregulation, as envisioned in the Economic Survey, is expected to drive:
Ease of doing business for companies.
Increased investment inflows from domestic and global investors.
Growth in key sectors through simplified policies.
This approach aligns with the government’s broader goals of achieving sustainable and inclusive growth.
Optimistic Growth Projections for FY25
The Indian economy’s projected 6.5-7% growth rate for FY25 remains within reach, driven by strong infrastructure investments, a robust services sector, and steady private consumption. However, global headwinds and domestic structural challenges could temper this optimism if not proactively addressed.
Key Recommendations by the CEA
Strengthen wage structures to enhance purchasing power.
Rethink corporate hiring strategies to reduce workforce informalization.
Focus on deregulation to stimulate entrepreneurship and FDI inflows.
Maintain fiscal discipline to support growth while managing inflation.
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