In uncertain world, Economic Survey pushes buffers & backs intelligent swadeshi, says Rajani Sinha, CareEdge

Amid heightened geopolitical conflicts, this year's Economic Survey has underscored the need for India to maintain adequate buffers. The survey notes that global turbulence could persist for a prolonged period and, therefore, the policy framework must remain proactive. As major economies turn increasingly protectionist, India should pursue swadeshi through intelligent import substitution rather than blanket protection. The focus must be on indigenisation in sectors with critical national vulnerabilities where domestic production is viable.

The survey also stresses that while policy reforms are essential, process reforms are equally critical, underscoring the need to ease regulatory hurdles and improve the ease of doing business. This assumes greater importance at a time when there is an urgent need to attract both domestic and foreign investment. Global turbulence has heightened risks to capital flows, which could have severe repercussions for the economy. Enhancing India's investment attractiveness is, therefore, imperative.

Another key issue highlighted by the survey is stress in the finances of some state governments and the need for prudent expenditure management at the state level. A sustained reduction in the combined fiscal deficit of the Centre and states is vital for strengthening macroeconomic stability and bolstering investor confidence.