Archive · 28 Oct 2025
Ex-CEA Subramanian: India Must Reduce Risks to Boost Private Investment
Imagine a country trying to grow bigger and stronger, like a person growing up.
India has grown pretty fast, but not everyone has gotten good jobs, and some important jobs haven't been created.
A former top economic advisor says the government has done a good job making it profitable to invest money in the country, but it's still too risky for people and companies to put their money in.
He says the government needs to make it safer and less scary for people to invest.
He also points out that just focusing on new, fancy things like computer smarts (AI) and services won't help everyone.
We still need to make sure there are plenty of jobs for everyday work, too.
He believes India's unique journey, using democracy to build itself, is special and has avoided a lot of fighting that other countries had when they were growing.
But to keep growing well for everyone, private investors need to feel confident.
Former CEA Arvind Subramanian emphasizes reducing risks for private investors to achieve inclusive growth.
India has achieved macroeconomic stability and improved returns on investment but faces high risks for private capital.
Post-1991 rapid growth did not sufficiently translate into formal, well-paying jobs for the population.
Focusing solely on sectors like AI and services will not ensure inclusive growth; low-skill job creation is crucial.
India's development path, marked by democracy and simultaneous transformations, is unique and has largely avoided bloodshed.
- Who
- Former Chief Economic Advisor Arvind Subramanian
- What
- Stated that the Indian government needs to focus on reducing risks to private investment to ensure inclusive and sustainable growth, despite current macroeconomic stability and strong public investment.
- When
- Recently, in comments reflecting on India's economic journey and future prospects.
- Where
- India
- Why
- To achieve inclusive and sustainable growth, create formal jobs, and ensure private capital feels secure enough to invest.
Government Focus
Author's Emphasis
Drivers of Inclusive Growth
Government Focus
Government has successfully increased returns on investment and built public infrastructure, and now needs to focus on reducing risks for private investors.
Author's Emphasis
While macroeconomic stability and public investment are strong, future growth must be anchored in an environment where private capital feels secure, and low-skill job creation is prioritized over a sole focus on sectors like AI and services.
Learning from India's Development Path
Government Focus
India's post-1991 growth was spectacular but didn't generate enough formal jobs, indicating a failure to learn from successes.
Author's Emphasis
India's unique development path, characterized by simultaneous democratic, nation-building, market creation, and modernization efforts on diverse soil, is a success in itself, avoiding the large-scale violence seen in Western state-building.
- Author
- Arvind Subramanian (Co-authored with Devesh Kapur)
- Book Title
- A Sixth of Humanity: Independent India’s Development Odyssey
- Key Argument
- Government must reduce risks to private investment for inclusive growth.
- Historical Growth Rate (Post-1991)
- Approx. 6-6.5% per capita
- Stated Economic Challenges
- High risks to private investment, insufficient formal job creation, persistent structural challenges.
- Stated Economic Strengths
- Macroeconomic stability, strong public investment, stable banking system.