The government’s Chief Economic Advisor (CEA) V Anantha Nageswaran on Wednesday said the high-frequency indicators (HFIs) show that the overall momentum of the Indian economy remains robust and continues on a fast-growth track. HFIs are economic data points released frequently that offer timely insights into the current state of the economy.
He emphasised that while trade-related issues are crucial, they should not overshadow other critical challenges.
While addressing an event in Delhi, Nageswaran said the consumption slowdown last year was majorly due to tight credit and liquidity conditions, prompting the government to announce substantial middle-class tax cuts in the Union Budget. The Reserve Bank of India (RBI) has also cut policy rates by 100 basis points (bps) and ensured a liquidity surplus to support growth, he said.
Nageswaran further said it was too early to assess the impact of US tariffs on India’s GDP growth.
He said that India must significantly increase efforts in artificial intelligence (AI) and semiconductor manufacturing to compete with the United States and China.
Nageswaran identified energy transition, energy security, AI’s economic impact, and sector-wide collaboration as the main challenges. He called for close coordination between public and private sectors, with resources pooled to meet national objectives. He urged the private sector to look beyond quarterly results and commit to long-term national priorities.
The US dominates AI research and chip design through companies such as Nvidia, Intel, and AMD, while China has expanded chipmaking under state-backed initiatives. The Indian government has launched programmes such as the Semicon India initiative for the first time to strengthen domestic manufacturing.
On Tuesday, the Cabinet Committee on Economic Affairs approved ₹4,600 crore for four semiconductor projects under the India Semiconductor Mission across Odisha, Punjab, and Andhra Pradesh.
Nageswaran flagged a shift in India’s consumption trends, pointing to a growing diversion of consumer spending towards online gaming and options trading.
Highlighting the data points related to consumer participation in online gaming, he mentioned that in July alone, monthly spending on online gaming stood at about ₹10,000 crore — implying an annualised run rate of around ₹1.2 lakh crore.
While drawing parallels with speculation in options and derivatives, Nageswaran mentioned that “in these situations, it is the house that builds and not speculates”.
The CEA observed that much of urban consumption is increasingly moving from listed to unlisted companies, with inadequate data capture for services’ consumption.
(IANS)