Regulators are here to ensure sustainable growth for corporates and businesses and not to create hurdles, India’s Chief Economic Adviser V Anantha Nageswaran said here. 

“Corporates should not see regulators as a nuisance. Businesses don’t realise that regulators are here not to create hurdles for your growth and development, but to ensure that it continues uninterrupted much longer,” he said while addressing MMA Annual Convention 2024 with the theme- India@2047-Leapfrogging to the Future. 

“If you look at history, our growth spurts have been more of a sprint than a marathon. The reason is that within a few years of good growth, excess optimism takes over and we end up making bad investment, borrowing, and lending decisions and then getting into the spiral of overheating in the economy – inflation shoots up, current account deficit picks up, currency become over-valued and then you find ourselves going back to square one. This should not happen,” he pointed out. 

Explaining further, Nageswaran said the recent decision of the RBI to increase the risk weight for unsecured personal loans or for that matter many of the restrictions and regulations market regulator SEBI is putting in place is to ensure that the capital market is a fair place. “These decisions are essential and will help us grow over the long term sustainably,” he added. 

Earlier, the CEA listed out various positives such as handling of the pandemic and efforts to put back the economy on the growth path in quick time, the establishment of digital public infrastructure, cleaning up of the corporate and financial sectors’ balance sheets and measures to make available adequate energy supply at reasonable prices amid geopolitical tensions and its consequences for the country to move ahead with optimism. He felt that India’s efforts in ensuring energy security in the wake of the Russia-Ukraine war was “under-appreciated”. 

Hurdles ahead

However, Nageswaran felt things cannot be taken for granted as there could be unexpected challenges that may cause roadblocks for growth. 

“While things can change quite rapidly, India can continue to focus on what is that it can do to ensure the outcomes it seeks. We should learn from past mistakes such as the issues that got us into trouble in the financial sector,” he added. 

Discussing challenges, he pointed out that the country should ensure that its population is healthy in its journey to becoming a developed country by 2047. “It should not be the case that India becomes sicker before it becomes richer,” he added. 

Nageswaran raised concerns over the consumption of processed foods. “When I see multinationals speak of India as the next frontier for processed food, it makes me worried,” he said adding, “Sports personalities promote and become ambassadors of unhealthy foods. And if you look at the data, child diabetes is alarming in India.” 

“India will be one of the major economic powers, socially continue to work towards a fair, just, egalitarian society and continue to be conscious of sustainability issues, said Vini Mahajan, Secretary, Union Ministry of Jal Shakti.