CHENNAI: Flagging “deep structural constraints” in India’s growth story, Chief Economic Advisor (CEA) V Anantha Nageswaran on Thursday said that low research spending, weak industry-academia linkages and skewed capital allocation could hinder the country’s long-term economic ambitions.
Delivering the 67th Institute Day address at the Indian Institute of Technology, Madras (IIT-M), Nageswaran said that India currently spends less than 1% of its GDP on research and development – far below major economies, limiting its ability to generate frontier innovation.
Collaboration between academia and industry remains inadequate, slowing the translation of research into real-world applications, he added. Highlighting another concern, he pointed to a “capital allocation bias” in favour of asset-light services over deep-tech manufacturing, and noted that financial markets tend to reward short-term returns rather than long-term investments critical for national development.
These structural issues must be addressed if India is to scale from a $3.9 trillion economy to around $8 trillion in the next six years and eventually reach $30 trillion by 2047, the CEA said.
On Artificial Intelligence, Nageswaran cautioned against focusing narrowly on its impact on the IT sector. Instead, he stressed on the need for creating “AI-resilient” jobs.