No country has reached a developed status without having a vibrant SME sector, said Chief Economic Advisor V. Anantha Nageswaran. Speaking at Indian Venture and Alternate Capital Association (IVCA) conclave 2025, Nageshwaran emphasised that with the trend of globalisation behind us, one must extract maximum possible growth from domestic sources, which means allowing enterprises and households to be able to take economic decisions, pursue economic activity without having to spend that limited bandwidth on unnecessary compliance and inspection.
He said, “This current de-globalisation and globalisation which we saw from 1980-2015 was part of a cyclical trend and in the current cycle of globalisation across the globe. Inflation is likely to be stickier and interest rates higher than it was in the past as the ability to drive efficiencies goes down. Supply chains are going to be providing for slack rather than just in time inventory.”
On the rupee depreciation in the current times, he said if India can reduce its inflation to the 3-4 per cent level from the 4-5 per cent over the last few years, it will help to contain the rupee depreciation.
Nageswaran also said that it is important for the private sector to understand that with this backdrop of globalisation in reverse we don’t sacrifice energy security in pursuit of energy transition He said, “Private sector has to be very well aware that while energy transition green energy are buzzwords in Europe, they have also started asking questions whether it has made it into a religion, so we need to be doubly sure that we don’t make green energy or energy transition into a religion but be pragmatic about it. We must go towards cleaner fuels, but the pace and technology sequencing are very important.” He added that in energy transition, nuclear energy plays a vital role as an important fuel, and in the Budget, the government has decided to open the nuclear energy sector to the private sector to further steer this purpose of energy transition.
Remaining optimistic on the vision of ‘Viksit Bharat 2047’ Nageswaran reiterated that today, there is no country other than India that is constantly growing at 6.5-7% or more. He said that the India is still in the demographic sweet spot for the next 15-20 years and is the only economy where growth has resulted in increased returns for investors, unlike other economies which face the demographic drawback with slower growth.
On the government’s stance on Chinese investments he said, “The government is unlikely to lift its ban on Chinese investments anytime soon. Nageswaran said that any changes to the current restrictions would take time and require a deeper understanding between both countries.
He said, “When it comes to investing in India, does China also see it as a mutual win-win is also a question that we need to answer, I don’t think it is something that you will expect to see immediate results because both sides are sort of crossing the river by feeling the stones so to speak.”