In this episode of the State of Economy Podcast, businessline’s KR Srivats speaks with Dr. D.K. Srivastava, Chief Policy Advisor at EY India, to discuss the economic challenges currently facing India, with a focus on both macro and microeconomic policies and their effects on the common man.  

 The episode starts with Srivastava explaining the key factors behind the slowdown include insufficient capital expenditure by the government, a contraction in investments, and global economic conditions. The conversation shifts to inflation, income growth, and employment trends, with Srivastava predicting the necessity of maintaining a 6.5% growth rate to keep the economy on track and avoid negative impacts on urban incomes and employment. 

The discussion touches on the vital policy measures, including fiscal consolidation, the Reserve Bank of India’s (RBI) role, and government actions to manage food inflation. Srivastava specifically discusses microeconomic interventions such as the Pradhan Mantri Garib Kalyan Anna Yojana, a food security scheme extended until 2029, and its potential for reducing poverty and improving welfare for low-income households. 

However, Srivastava argues that the government’s focus should shift from short-term subsidies to addressing structural unemployment challenges. He believes the key to long-term welfare improvements lies in creating sustainable, productive employment, rather than relying on temporary welfare benefits.  

Looking ahead to 2025, Srivastava stresses the importance of structural reforms, particularly in skill development and education, to match the needs of India’s evolving economy. He also highlights that while fiscal policies and interventions like controlling fuel prices can offer short-term relief, meaningful price reductions will depend on long-term supply-side improvements, such as investments in non-conventional energy and domestic reserves. 

In summary, while immediate relief may be limited, Srivastava emphasises that long-term reforms are essential to fostering sustainable growth and improving the overall economic well-being of India’s citizens. 

(Host: KR Srivats; Producer: Prethicshaa Gurumoorthy)

About the State of the Economy podcast 

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders.

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