Quality output is established through the market, not quality control orders: CEA

Quality is established in the marketplace through competition, not through quality control orders, Chief Economic Adviser (CEA) V. Anantha Nageswaran said in an interview to The Hindu.

Speaking a day after the Economic Survey 2025-26, authored by him and tabled in Parliament by Finance Minister Nirmala Sitharaman, Dr. Nageswaran on Friday also spoke about how States need to balance the costs of unconditional cash transfers with the needs of growth and development. 

“Quality is established in the marketplace and is established through competition, not through quality control orders (QCOs),” Dr. Nageswaran said, when asked how to reconcile the Survey’s call for greater quality output while the government is revoking  QCOs. 

“Quality control orders are necessary in important situations and many countries are using those also as an instrument of trade, but it is not necessarily the means through which you establish quality,” he added. “You establish standards and standards are important, but we also need to have the infrastructure to apply those standards and enforce them.” 

In the interview, the CEA also said that he was not in a position to spell out a particular political economy road map or a pathway to tackle the trade-off between populism and growth, but added that States must be careful when choosing between the two. 

“Yes, cash transfers are important from the point of view of winning elections in democracies, but it is not often turned out to be the case that these alone guarantee victories,” Mr. Nageswaran said. “But ultimately, it’s about sustainability, it’s about finding ways to balance democracy compulsions with growth and development compulsions and that is the balancing act and we should make sure that we don’t err too much on one side.”

The CEA also said that an argument could be made that India has already moved from resilience to acceleration. 

“First of all, what is resilience and what is acceleration, that is a matter of personal perspective,” he said. “If you are able to grow post-COVID at 7-plus percent while everybody is struggling to grow at 5%, you are accelerating compared to others. So I don’t know how watertight these compartments [of resilience versus acceleration] are.”

The Economic Survey had upgraded its medium-term growth outlook for India to 7% from the 6.5% it had estimated in 2022-23.