India's Economic Future: Trust, Growth, and Capital Investment

Chief Economic Advisor V Anantha Nageswaran has called on India's business sector to significantly increase capital expenditure and align workers' compensation with profitability growth to reach a sustained economic growth rate of over 6.5%, aiming for developed nation status by 2047.

He stressed the critical role of a virtuous investment cycle, where increased investments enhance capacity, create jobs offering better remuneration, and fuel higher household savings, thereby accelerating economic progress. Nageswaran highlighted a disparity between profitability growth and capital formation, a challenge traditionally seen in developed nations.

The advisor emphasized the importance of regulatory trust, advocating for reduced governmental burdens to spur capital productivity and urging collaboration between government and private sectors. Achieving these targets, according to Nageswaran, is essential for India to avoid the middle-income trap and leverage its economic potential.

(With inputs from agencies.)