What Indian Economy Needs Urgently At This Hour- Senior Economist Mitali Nikore Decodes At Times Now

Added: 2026-05-19

[00:00:00]Hello and welcome. Today not a single person is untouched by the economic pain we are witnessing or rising prices. To decode this further, I'm joined by senior economist Mitali Nikore.

[00:00:12]Mitali, thank you for joining us.

[00:00:15]So, very nice to be on your show, Sakshi. Essentially, the first and the most important aspect of it is the oil dependency that we have as a country.

[00:00:26]And of course, India is not alone in this. There are a number of economies which are highly dependent on oil which don't even have the kind of renewable energy investments and assets that India does. And also, they don't even have the potential. At least India, we have the potential to tap into solar energy for example in a very big way to power up our economy in the future, but we haven't done so as of now. And that's the structural reform that we need. So, to get out of this situation, unfortunately, a little bit of pain would have to be born because we need to reorient the direction of our growth.

[00:01:05]You know, we need to move away from this oil dependency towards renewable energy.

[00:01:09]Move away from, say, personal diesel or petrol cars to electric vehicles and public transport. Move away from, you know, overexposure to certain FII classes which are actually, you know, creating issues with even our foreign exchange towards a more balanced forex regime. So, a number of these changes would have to take place. Of course, they wouldn't probably be required had the oil shock not taken place. But since it has and since we are in this situation, we would have to take some steps to get out of it.

[00:01:43]Right. Well, these steps are the need of the hour, but for the common person really watching, the consumer watching, this transition sounds long-term in nature, Mitali. In the near term really, do you think How do you know, what impact do you think the PM's appeal is really going to have on the citizens of India?

[00:02:01]So, I think it's a very interesting social experiment. You know, it's it's pretty much I think we've been tracking this situation across countries. And there are very few countries where the head of state has actually openly spoken to the citizens in this manner and said that you know, we are going through a difficult time. We all have to tighten our belts and these are some ways in which we can do it and I need you all to pitch in. I think it's a very honest appeal to be very frank and uh to take that you know, the confidence from the citizens to take the citizens along in this in this journey. But the questions which are being raised by the opposition and by a number of people on ground on why does it come on to you know, the marginalized? Why does it come on to those who cannot bear that burden? Are you know, to some extent those are things which the government now needs to work on that absolutely people are complying. The ones who can work from home are surely making the efforts. I can see it in my own circles when I look at certain leaders of companies, CEOs, uh industry bodies. I mean, we've seen industry bodies like FICCI and CII also issue uh you know, notices saying that you know, our members will make an attempt to do as much of work from home as possible. We've seen governments across states and government employees also making that effort. But the ones who absolutely cannot do it and the ones who are in those portions of the economy that cannot be made virtual like say industries or agriculture or manufacturing, uh for them, you know, we need to have a you know, series of solutions that need to come in through this year to ease the pain.

[00:03:47]Right, a series of solutions really. And you know, for those wondering that look, net foreign direct investments have plunged. Your thoughts on how India can revive the situation altogether as investments have also now taken center stage given the geopolitical uncertainty, Mitali.

[00:04:03]So, I think one very interesting trend that is starting to come in on the investment side is that a lot of people whose uh you know, whose companies have seen say their foreign partners uh you know, getting a bit of a cold feet because of not wanting to expand the investment. You know, maybe not pulling out, but saying, "Okay, I don't think we need to set up this second plant yet or I don't think we need to you know, we need to do this expansion yet." That is something which I am seeing within the manufacturing space happening. And that is not again because of India's inherent uh you know, economic structures. They are very bullish still on India being the preferred market out of you know, all of the different options that they have for coming in for manufacturing, but they're more worried about the global demand and the overall macroeconomic slowdown that you know, that we would see uh especially in markets like the Gulf uh you know, where India had recently signed an FDA and and could have maximized its exports. It's it's not possible anymore in this scenario. So, so very honestly, I think domestic investment uh is coming in to some extent to fill that gap where the FDI uh has not grown. Again, I would not say that any FDI investor has pulled out. It's mostly the FIIs who are pulling out. Right, Mitali. And how much of an impact do you think the current scenario, uh the volatile scenario altogether will have on growth and if so, for how long?

[00:05:31]So, so very honestly, in this situation, I would say export of services is something that we have to keep on expediting and I think the IT sector is really trying to also diversify its services and move more up on on AI value chain so that you know, they can integrate AI services much more in their in their portfolio, which will help them with expanding services across the world. And the second area that we really have to think about is our domestic market, and how can we strengthen and deepen our domestic market? And if you see the Prime Minister also alluded exactly to this.

[00:06:05]He said, "We need to buy Swadeshi." Now, there's a very clear logic to this, right? If we are not able to export our goods, and we are still importing high-value goods, then our foreign exchange is also going out. Now, this is a war situation.

[00:06:20]This is not a peacetime situation. In a peacetime situation, as much trade as possible, it's good for all economies, right? For the global economy. But in a war situation, you don't know, you know, where where things are going to go. So, in that situation, definitely you have to favor your own country's, you know, goods and services. And I really believe that shopkeepers, retailers across the country should just set up a separate aisle, like a Made in India aisle. I've seen this in grocery stores across the UK, across the US, where you have a, you know, very proud Made in Britain or a Made in USA kind of aisle, where every product is made in that country. So, I think we should also do this because at the end of the day, this is one way to kick-start and deepen the domestic economy. Is India facing a temporary slowdown, or are there signs of a deeper structural challenge than Madhavi? How would you describe this current situation?

[00:07:18]So, I think it's a bit of both, to be very honest. And you know, I think your question is just fantastic. I mean, you know, but it's also a bit of both, because very honestly, if you think about it, at some level, these challenges, like say what we're seeing on the oil dependency, that's what I started with, that is a structural issue, right? That's the that's the foundation of a lot of our energy usage, how do we use our energy and how do we get our energy? That's a structural bedrock of the economy. So there definitely we need structural reforms to move towards other solutions and I think like someone like you know Mr. Nitin Gadkari for example has been saying this for years, right? That we need to move into an ethanol blending model that we need to that we have so many new technologies available for transportation as a sector which is one of the biggest energy users, right? And even for rural electrification, you know, independent power production for example is one of the proven solutions from both Europe and Africa, you know, where we've seen in several African countries has been adopted and has reduced the cost of energy distribution. So so very honestly, you know, there are proven solutions available and we need to now have slightly faster decision-making on those areas. Even for electric vehicles now, you know, the attitude of people towards EVs has changed a lot. The cost of EVs has come down. You know, the the variety in the market has increased and the charging points which used to be one of the biggest issues, we are seeing that EVs are not only coming up in common places like for example a parking lot or a you know, petrol pump, but also they are being provided with the car so that you know, that actually solves your urban mobility problem for a personal passenger car user. But what we haven't seen work on is public transport because we really need to see more buses, more walkways, more footpaths, more cycle lanes, more of course we have metros, but how do you get to the metro, right?

[00:09:23]It is important to solve the first and last mile connectivity problem and we have a golden, you know, chance right now to convince a lot of people to move towards public transport and that could be a long-term shift. So, honestly, we really have to re-engineer some parts of our economy and hopefully those could be re-engineered for the longer term.

[00:09:47]And I really feel that renewable energy is is a major part of that story.

[00:09:52]Right. So, faster decisions, faster reforms really the need of the hour and of course a mindset shift all together with the whole electric vehicle push and usage of public transport as well. Thank you so much Madhavi for sharing your thoughts and for this exclusive interaction. Thank you.