Economic Survey advises govt to wipe out trust deficit and ‘get out of the way’

In one of the early reactions to the Economic Survey 2025 on Friday, former finance minister P. Chidambaram posted on X, “I was delighted to read the preface to the Economic Survey 2024-25 written by the Chief Economic Advisor. After the introductory 10 paras that refer to the difficulties faced by U.S. and Europe, the next 10 paras describe the state of the Indian economy.

"They are a powerful indictment of the government led by Mr Narendra Modi and the policies pursued so far. Just read these 10 paragraphs and you will know what was wrong with the government during the last 10 years and what needs to be done. His advice to the government to 'Get out of the way' is the most sensible piece of advice that I have heard from any government official in the last 10 years."

CEA V. Anantha Nageswaran concludes the preface to the Economic Survey by pointing out that globalisation is on the retreat. “As Spartans apparently believed, ‘the more you sweat in peace, the less you bleed in war’, he writes, and cautions that India is largely on its own and will have to do things differently than Europe and the developed world.

Chidambaram followed up by posting on X, “The final advice given by the CEA is the most timely and powerful. 'Wiping out the trust deficit in the country is imperative and government agencies have to set the agenda in this regard’. Nobody trusts this government and its weaponised agencies — not business, not academics, not professionals, not farmers, not workers, not teachers, not students, not the middle class, and not the poor,” the post reads.

Chidambaram then adds, “The CEA has given more pointed advice. Among them are ‘give entrepreneurs and households back their time and mental bandwidth’, ‘roll back regulation significantly’ and ‘stop micromanaging economic activity’… the most significant piece of advice is ‘changing the operating principle of regulations from 'guilty until proven innocent' to 'innocent until proven guilty'."

The CEA, in fact, also states that “it is reasonable to expect that financial regulators hold themselves to the same standards that they expect of regulated entities” without mentioning names but clearly referring to SEBI (Securities and Exchange Board of India).

He also bats for a push to public transportation and writes, “given India’s vast size and limited land availability, public transportation is a more efficient alternative for viable energy transition. Therefore, national-level policies and local nudges must promote and facilitate its use, going beyond the focus on tail-pipe emissions of private transportation choices”.

These are some of the other points that the CEA makes:

· “Getting out of the way” and allowing businesses to focus on their core mission is a significant contribution that governments around the country can make to foster innovation and enhance competitiveness. The most effective policies governments — Union and state — in the country can embrace is to give entrepreneurs and households back their time and mental bandwidth. That means rolling back regulation significantly.

· ‘Business as usual’ carries a high risk of economic growth stagnation, if not economic stagnation…trust is a two-way street and the non-government actors in the economy have to vindicate the trust reposed. In fact, quite a significant chunk of the complicated compliance requirements stems from the efforts of businesses wanting to keep out domestic and foreign competition to the detriment of other industries and the economy. Nonetheless, wiping out the trust deficit in the country is imperative and government agencies have to set the agenda in this regard.