Investment is the key driver of growth, says chief economic adviser K Subramanian

Krishnamurthy Subramanian, the chief economic adviser to the government of India, shared his views on the economy at the 6th SBI Banking and Economic Conclave.

“What was quite informative was that for economies that are at the stage at which we are, it is an investment that is the key driver of growth and consumption is the force multiplier,” Subramanian said on Friday.

“This is important because at the macroeconomic level, every variable whether it is investment, consumption, demand, exports, these are both causes and effects – they are causes for some other macroeconomic variables while they are effects of other macroeconomic variables. That is where the scholarly rigour that is important to be able to cut through the clutter and disentangle these interdependent relationships and drive down to what is the key driver. So that the policy can be framed very well,” he added.