Expressing serious anxiety over significant fall in investment in India in the last decade, Chief Economic Advisor (CEA) Krishnamurthy Subramanian has said investment is crucial to make country $5 trillion economy in five years. He has identified three engines to promote investment – land reform (land acquisition laws need reform), labour reform (ease labour laws to encourage employment), and power (price it better to provide access to encourage a more balanced growth across the country).
Subramanian has noted that investment as a percent of Gross domestic product (GDP) was 40 percent in 2008 and this has come down to 29 percent in 2018. This is worrying statistic for a growing economy. He noted the country needs to start differentiating between pro-market and pro-business economies. Adding further, he said 'we can do this effectively by allowing the market to determine which companies survive with minimal government interference in the form of bailouts.’ He added that a good policy is characterized by averages and aggregates and bad policy is characterized by anecdotes.
CEA has further said that the current trade wars could significantly impact India's position in the global trade ecosystem. He added ‘the country currently only holds two percent of the global trade market share and we as a country need to leverage these opportunities to grow this number, by making the companies more productive, reduce trade restrictions, and identifying gaps in the trade value chain that we can capitalize on.’ He pointed out that manufacturing incentivized by policies like Make in India and agriculture by ensuring access to market for farmers are key sectors that are going to drive a significant portion of India's growth over the next few years.