The Government of India has extended the tenure of Chief Economic Adviser (CEA) V. Anantha Nageswaran for an additional two years, ensuring his service until March 31, 2027. The decision was approved by the Appointments Committee of the Cabinet (ACC), which is chaired by Prime Minister Narendra Modi. According to an official order, Mr. Nageswaran’s tenure has been extended on a contract basis until the mentioned date or until further notice.

Continuity in Economic Advisory Leadership

Mr. Nageswaran initially assumed office as Chief Economic Adviser on January 28, 2022, for a three-year term. His extension comes at a crucial time when India’s economic landscape is being closely monitored amid global uncertainties and domestic economic shifts.

The CEA’s role is pivotal in formulating economic policies, providing recommendations to the government, and drafting the Economic Survey, which is presented in Parliament before the Union Budget. His continued tenure ensures policy continuity, especially at a time when India’s economy faces both growth prospects and structural challenges.

Economic Growth Outlook and Policy Implications

The extension of Mr. Nageswaran’s term follows the release of the Economic Survey 2024-25, which projected India’s GDP growth for the next financial year at 6.3-6.8%. This projection underscores a measured optimism regarding economic expansion despite global uncertainties and domestic economic moderation. The government’s advance estimates suggest the Indian economy is likely to grow at 6.4% in the current financial year.

With his expertise in macroeconomic policy and financial markets, Mr. Nageswaran is expected to continue playing a crucial role in shaping economic policies that bolster investment, employment, and fiscal management. His insights will be significant in guiding India’s economic trajectory as it navigates global inflationary pressures, trade realignments, and evolving financial regulations.

Academic and Professional Background

Before taking up the CEA role, Mr. Nageswaran had an illustrious career spanning academia, research, and financial markets. He has previously worked with Credit Suisse Group AG and Julius Baer Group and has been actively involved in policy advisory roles. Between 2019 and 2021, he served as a part-time member of the Economic Advisory Council to the Prime Minister.

Apart from his corporate experience, he has contributed significantly to academia, teaching at prestigious business schools and institutes of management in India and Singapore. He holds an MBA from the Indian Institute of Management, Ahmedabad, and earned a PhD in Finance from the University of Massachusetts in 1994, specializing in the empirical behavior of exchange rates.

Contributions to Economic Research and Policy Initiatives

Mr. Nageswaran has been instrumental in shaping research-driven policy initiatives. He co-founded the Takshashila Institution, an independent research center focusing on public policy. Additionally, he played a key role in launching India’s first impact investment fund with the Aavishkaar Group in 2001, aimed at fostering social entrepreneurship and sustainable development.

His leadership at the IFMR Graduate School of Business as Dean and his role as a Distinguished Visiting Professor of Economics at Krea University further highlight his academic contributions to economic policymaking.

Challenges and Opportunities Ahead

As CEA, Mr. Nageswaran is expected to address several economic challenges, including managing inflation, enhancing fiscal discipline, promoting digital and green economy initiatives, and strengthening India’s financial markets. His tenure extension aligns with the government’s commitment to ensuring stability in economic policymaking at a time when India is positioning itself as a global economic powerhouse.

With significant economic policy measures anticipated in the coming years, Mr. Nageswaran’s extended tenure will allow him to oversee critical economic reforms, structural adjustments, and fiscal strategies aimed at sustaining India’s growth momentum.

The decision to extend his tenure underscores the government’s confidence in his ability to navigate complex economic landscapes and provide strategic guidance that aligns with India’s long-term economic vision.

With the much-anticipated Union Budget 2025 set to be unveiled by Finance Minister Nirmala Sitharaman on February 1, India stands at a crucial juncture of economic policymaking. The budget is expected to address a wide spectrum of economic and social concerns, balancing growth-oriented reforms with fiscal prudence. As citizens and businesses look forward to policy announcements, the focus remains on key areas such as personal tax relief, capital expenditure, artificial intelligence, inflation control, and MSME support. Additionally, the Economic Survey, scheduled for release a day prior to the budget, will offer a detailed insight into India’s financial health and future economic projections.

Taxation Reforms: Easing the Burden on the Middle Class

A significant expectation from Budget 2025 revolves around tax reforms, particularly concerning personal income tax. The government is reportedly considering an overhaul of tax slabs to provide relief to the middle class and stimulate consumption. Many experts predict an increase in the standard deduction limit from the current ₹50,000, along with zero income tax for individuals earning up to ₹10 lakh annually. This move aims to boost disposable income, thereby driving economic activity in various sectors.

The debate surrounding the old vs. new tax regime continues, with many anticipating that the government might phase out the old tax structure in favor of a more streamlined and beneficial new tax regime. Additional benefits may include enhanced tax deductions for home loans, health insurance, and voluntary NPS contributions, thereby making savings and investments more attractive.

A significant portion of government spending is likely to be directed towards capital expenditure, particularly in infrastructure, defense, and social sectors. In the 2024-25 budget, the total expenditure stood at ₹48.2 lakh crore, with ₹11.11 lakh crore allocated to infrastructure development. The upcoming budget is expected to further increase this allocation, creating more job opportunities and enhancing economic growth.

With an emphasis on railways, roads, and energy, large-scale projects will be prioritized to bolster India’s connectivity and trade competitiveness. Moreover, with geopolitical uncertainties, defense spending is expected to rise, particularly in indigenous arms manufacturing, in line with the Atmanirbhar Bharat initiative.

GDP Growth and Economic Outlook

India’s GDP growth trajectory remains a focal point of Budget 2025. The second quarter of 2024-25 saw a GDP dip to 5.4%, the lowest in seven quarters. However, the government aims to project a higher growth rate, leveraging factors such as revenue growth through consumption revival and better fiscal management.

While industry leaders advocate for more support for private investment, the budget is expected to strike a balance between stimulating domestic demand and maintaining fiscal discipline. Policymakers also aim to rationalize subsidies while ensuring targeted financial assistance for key sectors.

Inflation Control and Fiscal Prudence

Inflation remains a pressing concern, with recent figures hovering between 5.4% and 6.2%. The government is expected to introduce targeted measures to curb inflation, including: Strengthening supply chain mechanisms to prevent price volatility. Increasing food and fuel subsidies where necessary. Boosting agricultural output to stabilize food prices. Additionally, the government’s commitment to fiscal prudence is evident in its efforts to reduce the fiscal deficit from 5.6% (2023-24) to below 4.5% in the next fiscal year. This will likely be achieved by increasing tax revenue, reducing unnecessary subsidies, and enhancing foreign direct investment (FDI) inflows.

Export and Trade Policy Adjustments

India’s export and import policies will also take center stage in the 2025 budget, with a focus on: Reducing import dependence by incentivizing domestic manufacturing. Revising customs duties to support exporters. Enhancing financial aid to exporters through schemes such as interest equalization. Strengthening India’s special economic zones (SEZs) and trade corridors will also be a priority to improve global trade partnerships and market accessibility.

Strengthening the Defense Sector

Given the geopolitical landscape, particularly tensions along the LAC with China, the defense budget is set to receive increased allocation. The 2024-25 budget allotted ₹6.2 lakh crore for defense, and this number is expected to grow further. Investments will be directed towards: Indigenous weapons procurement under the Atmanirbhar Bharat initiative. Cybersecurity and space defense modernization. Enhancing border security and infrastructure. With self-reliance in defense production gaining traction, India’s emphasis on modernizing its armed forces will continue to be a crucial aspect of the budget.

Artificial Intelligence and Digital Transformation

A major highlight of Budget 2025 is expected to be the integration of Artificial Intelligence (AI) into India’s economic fabric. The government is likely to introduce policies that encourage: Tax incentives for AI-driven startups and research firms. Establishment of dedicated AI research and development zones. Expansion of digital credit guarantee schemes to aid MSMEs. Experts believe that AI-based credit assessments and risk profiling can revolutionize India’s financing sector, making credit access more inclusive and efficient for businesses and individuals alike.

As Finance Minister Nirmala Sitharaman prepares to present the Union Budget 2025, expectations are centered on balancing economic growth with financial stability. The government’s strategic focus on tax reforms, capital expenditure, AI integration, and inflation control reflects its commitment to fostering a robust and inclusive economy.

With major announcements anticipated in personal taxation, infrastructure development, trade policies, and digital transformation, Budget 2025 is poised to be a pivotal moment in shaping India’s economic future. As the budget unfolds, businesses and citizens alike will be keenly observing how these initiatives translate into tangible growth and prosperity.

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Government Extends Tenure of Chief Economic Adviser Anantha Nageswaran Until March 2027