
Reforms need to empower agriculture and MSMEs, promote a balance between profits and wages and move from digitalisation to deregulation for sustainable growth, said Mr V Anantha Nageswaran, Chief Economic Advisor, Government of India at AIMA’s 52nd National Management Convention.
I want to share my thoughts on the next generation of reforms that India needs to sustain growth and strengthen resilience. Reforms are often seen as the responsibility of government alone, but in a country as large and complex as ours, both the state and the private sector must play their part. Only then can we unlock the full potential of the economy.
Read more: Next-gen reforms: Driving bottom-up growthWe are living through a period of extraordinary global uncertainty. Geopolitical realignments, fragile fiscal positions in advanced economies, and volatility in trade and energy markets all create a difficult environment. Yet India has consistently managed to surprise on the upside. Real GDP grew by 7.8% and nominal GDP by 8.8% in the first quarter of this year, reflecting genuine economic momentum. Over the last four years, India has been one of the fastest-growing economies in the G20. I believe this strength comes from the cumulative effect of reforms undertaken over the past decade.
These reforms have laid a foundation of resilience. Physical and digital infrastructure have expanded rapidly. Small and medium enterprises are moving from fragmentation to formalisation. The Insolvency and Bankruptcy Code, the Goods and Services Tax, the Real Estate Regulation Act, and the consolidation of public sector banks have all reshaped the economy. Our COVID response was targeted and calibrated, helping protect both lives and livelihoods. More recently, simplification of tax processes, direct tax reductions, and improvements in GST procedures have enhanced business confidence.
Fiscal stability has been central to this effort. From a pandemic deficit of 9.2%, we have reduced the fiscal deficit to 4.4% this year. That discipline contributed to India receiving its first sovereign credit rating upgrade in three decades, lowering the cost of borrowing across the economy. Stable energy prices, maintained despite global shocks, have also provided critical support. These factors together suggest that India is now more resilient to global turbulence than is often recognised.
Looking ahead, I believe competitiveness and innovation must drive the next generation of reforms. For government, the priority is deregulation and reducing the cost of compliance. What I call the “cost of being honest” must come down, so that enterprises find it easier to operate transparently. For the private sector, the challenge is to move away from protectionism and toward productivity. Protection may preserve market share, but it does not expand the overall pie. Productivity, competitiveness, and innovation do. Where protection is sought, it must be time-bound and tied to measurable performance, as the East Asian experience has shown.
The other challenge is to balance technology and employment. AI and automation will raise productivity, but in a country with a young and growing workforce, technology must complement rather than displace labour. Social stability is as vital as fiscal or policy stability. Businesses should view this not as charity, but as enlightened self-interest.
In my view, structural reforms are a shared responsibility. Government and industry both have roles to play. If we stay focused on competitiveness, innovation, and inclusion, India can sustain growth, build resilience, and emerge as one of the world’s most dynamic economies in the decades to come.
Watch the full session- https://www.youtube.com/watch?v=qIG6y2b12kE