April 24, 2024

India’s $3.7-trillion economy can absorb capital inflows comfortably, but needs reforms: CEA

n a conversation with businessline Editor Raghuvir Srinivasan at a breakfast with businessline session, Chief Economic Advisor to the Government of India, V Anantha Nageswaran, said that India’s $3.7 trillion economy is well-positioned to absorb (the expected flood of) capital inflows than ever before, but reforms are necessary.

Nageswaran credits India’s growing absorptive capacity, at least in part, to the production-linked incentive (PLI) scheme for which 14 sectors, including the capital intensive ‘semiconductors’, are eligible. 

However, he underscores that to be able to take in capital inflows and not end up with a problem of plenty, India should undertake “granular reforms”, particularly in land and labour, which calls for cooperation of both the Centre and State governments. 

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