He emphasised that recent global policy actions and responses indicate pressure on economic growth worldwide, making it imperative for India to sustain confidence and execute policies with minimal regulatory intrusions.
Addressing the current state of the global economy, Nageswaran noted that actions taken by governments over the last month point to increasing headwinds.
“It is very clear that growth will come under pressure all over the world, and therefore it is very incumbent on all of us to do whatever we can to sustain a mood of constructive optimism in the country,” he said.
The CEA reiterated the government’s focus on deregulation, particularly in the non-financial sector, and enhancing the ease of doing business (EoDB).
He emphasised that economic policies must be implemented with the least possible intrusions.
Nageswaran stressed that regulations must evolve with the times, ensuring they are cost-effective, simple, and free from unintended distortions.
A comprehensive regulatory framework is necessary to maintain clarity and consistency in governance, he added.
On foreign direct investment (FDI), Nageswaran acknowledged that rising global risk aversion could impact inflows into India. However, he pointed out that the government has taken a significant step by increasing the FDI cap in the insurance sector to 100%.
He suggested that policymakers must now consider additional safeguards to support higher FDI limits in critical sectors like insurance.
The CEA also indicated that India is looking to facilitate mergers and acquisitions (M&A) to create a more attractive investment climate. He noted that India’s Bilateral Investment Treaties (BITs) must strike a balance between investor protection and national sovereignty.
Highlighting the importance of a modern regulatory model, Nageswaran stated that this is an opportune time to conduct a 360-degree review of financial sector regulations. He emphasised that policy initiatives announced in the Union Budget must be implemented swiftly.
