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Speaking to CNBC-TV18, he noted that while infrastructure investment—both brownfield and greenfield—is crucial, the public-private partnership (PPP) model must be reinvigorated to balance the demands on public resources. “How we approach this, as you correctly put it, will have to change”, he told CNBC-TV18’s Shereen Bhan.
Nageswaran highlighted that both the union and state governments face capacity constraints in increasing public sector investments in FY25. He underscored that the private sector, which includes both enterprises and households, plays a crucial role in driving demand and justifying its own investments. “…the private sector can actually do a lot to stimulate demand and thereby justify its own investments, and that is where they need to focus on”, the CEA said.
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He also pushed back against industry expectations that the government should cut taxes, keep interest rates low, increase capex, and remain fiscally prudent, calling these “not mutually consistent”…”you know, asking the government to ramp up capital investment, lower taxes, keep interest rates low and maintain low fiscal deficits, these are not a mutually consistent set of recommendations or asks on the part of the private sector”, the CEA observed.
The CEA also believes the slowdown in urban demand is not a structural problem but quasi-cyclical, with a number of factors precipitating it including the macro-prudential measures taken by RBI. To sum up, the Survey says India is on a “steady” growth path and governments should adopt the “deregulation stimulus” to steer the economy. Taking a leaf out of Sparta’s history, the CEA concludes, “The more you sweat in peace, the less you bleed in war”.
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