Growth is not enough, it must create better jobs: CEA

New Delhi: India’s economic growth can translate into meaningful transformation only when its gains are shared fairly between workers and corporates, Chief Economic Adviser (CEA) V Anantha Nageswaran said, stressing that fairness is not an act of charity but a condition for a healthy and sustainable market economy.

“Growth changes the country only when it is shared honestly between those who do the work and those who put up the money,” he said at a keynote address at an AIMA event.

Nageswaran said the debate over fairness should not be framed as a choice between workers and businesses. Both are part of the same economic bargain, with capital entitled to earn a fair return while workers should have a meaningful share in the prosperity generated by their work.

“Fairness, of course, is not charity,” he said, adding that a sustainable market ultimately depends on consumers having enough purchasing power to buy the goods and services businesses produce. “A healthy market needs customers who can afford to buy, and those customers are, in the end, someone’s workers,” he said.

He said there was an honest way to earn returns on capital and a self-defeating way. Holding down wages or delaying payments to suppliers to increase profits could work only until customers ran out of savings, he said. The sustainable approach was to lower real costs, with governments also having a role.

Nageswaran said governments must ensure cheaper power, affordable land and lower compliance burdens to reduce the cost of doing business.

“Lowering the cost of doing business is at the core of what governments can and should do to create jobs,” he said, adding that businesses, rather than governments, ultimately create lasting jobs.

India’s economic challenge, he said, was no longer simply to grow faster but to ensure that growth translates into better jobs, higher wages and greater economic security. The CEA said India’s growth outlook was increasingly settled, with cautious forecasts putting medium-term annual growth at around 6.5-7 per cent. The economy grew 7.8 per cent in the first quarter despite headwinds from the West Asia crisis. Growth measures how much larger the economy becomes, while transformation concerns “who benefits from it”, he said. He pointed to measures since June 2024, including an employment-focused Budget, trade agreements, lower compliance requirements, fiscal consolidation, stronger bank balance sheets and improved access to credit.