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Exports won't be key driver of India's growth: Expenditure Secretary Somanathan

TV Somanathan, Expenditure Secretary, panel discussion on “Indian Economy – on the road to recovery?” organised by the United Way Chennai on Saturday, February 8, 2020.

TV Somanathan, Expenditure Secretary, panel discussion on “Indian Economy – on the road to recovery?” organised by the United Way Chennai on Saturday, February 8, 2020.   | Photo Credit: Bijoy Ghosh

Investment opportunities and bigger domestic consumption puts India on an advantage over other South East Asian economies, he says

T.V. Somanathan, Secretary (Expenditure), Union Ministry of Finance said that exports would not be the main driver of India's growth in the next three years which will have to be led by domestic investment and consumption.

During panel panel discussion on Indian Economy — on the road to recovery? organised by the United Way Chennai, Mr. Somanathan cited the difficult external trade environment and the tariff war between U.S. and China as the key reasons.

On the positive side, one advantage India has over other South East Asian economies is its potential investment and domestic consumption is bigger than theirs, he pointed out.

“Our demography is different, when compared to shrinking population across the world. We still have an opportunity at least for a decade where domestic demand and domestic infrastructure investment can drive a fairly high rate of growth. We have to pull up our socks and make sure that domestic investment and consumption grows faster than it was in the immediate past,” Mr. Somanathan said.

On protectionism

He also dismissed views that the increase in custom duty on certain goods in the budget as protectionism.

Mr. Somanathan pointed out that it is not possible to be unilaterally fair, when the other side is adopting to protectionist measures.

The government is fine with building an open economy, however, it is also cautious about safeguarding its interest especially when the other side is not fair, he said.

Mr. Somanathan added that the Finance Minister has announced measures to strengthen the export-oriented sectors which are labour intensive such as textiles.

Earlier, delivering the key note address, he said there were a few themes that underpinned the Union Budget, including promoting the growth of the economy without sacrificing macro economic stability.

There is a major thrust on agriculture and rural development where the provisions have increased very substantially, Mr. Somanathan said.

“There is also an initiative to double the farmers' income. A lot of people are confused about this doubling, asking when the growth rate of agriculture is 2.5%, how will you double farmers income. The aim is not doubling farm output but is doubling farmers income,” he added.

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Printable version | Feb 28, 2020 9:19:34 AM | https://www.thehindu.com/business/exports-wont-be-key-driver-of-indias-growth-expenditure-secretary-somanathan/article30769002.ece

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