Archive · 1 Sep 2026
Former CEA Backs Modi’s Push for Domestic Spending
Krishnamurthy V Subramanian said India can continue growing even when the world economy is uncertain.
He believes decisions made inside India are especially important.
He pointed to Japan, whose economy grew more than 25 times between 1970 and 1995.
Japan experienced oil shocks, high inflation and high US interest rates during that period.
Subramanian said Indian consumers and businesses already provide most of the country’s economic activity.
He supported Narendra Modi’s request that people spend more within India.
However, he said spending alone cannot create lasting growth.
He also called for reforms to make it easier and cheaper to use land, labour, power and money for manufacturing.
Krishnamurthy V Subramanian said India can keep growing rapidly by getting domestic policies right despite global uncertainty.
He cited Japan’s nominal GDP growth from $221.8 billion in 1970 to $5.64 trillion in 1995 as an example.
Subramanian said consumption contributes about 58-60% of India’s GDP and is overwhelmingly domestic.
He endorsed Narendra Modi’s call for greater spending within India but said consumption alone would not be sufficient.
He urged reforms involving land, labour, power, manufacturing scale and capital to improve India’s competitiveness.
- Who
- Former Chief Economic Adviser Krishnamurthy V Subramanian and Prime Minister Narendra Modi.
- What
- Subramanian backed Modi’s push for greater domestic spending and advocated further structural reforms to sustain India’s growth.
- When
- Subramanian’s comments were posted on September 1, 2026; he served as Chief Economic Adviser from December 2018 to December 2021.
- Where
- The comments concerned India and referred to Modi’s appeal from Bishkek.
- Why
- Subramanian said stronger domestic demand and improved domestic policies could help India withstand global uncertainty and generate its own growth momentum.
- Japan’s GDP growth
- Nominal GDP rose from $221.8 billion in 1970 to $5.64 trillion in 1995, according to Subramanian.
- India’s consumption share
- Consumption accounts for about 58-60% of India’s GDP and is overwhelmingly domestic.
- India’s investment share
- Investment makes up about 28-30% of India’s GDP, with most investment also coming from domestic sources.
- Government expenditure
- Government expenditure contributes around 10-12% of India’s GDP.
- Former officeholder
- Subramanian served as Chief Economic Adviser from December 2018 to December 2021.
- Recommended reforms
- Subramanian highlighted land, labour, power, manufacturing scale and capital as areas needing continued reform.