IMF on India’s growth Prospects

Context: 

India continues to remain a relative “bright spot” in the world economy, and will alone contribute 15% of the global growth in 2023, International Monetary Fund (IMF) Managing Director said.

About Findings of IMF:

•  While digitisation pulled out the world’s fifth largest economy from pandemic lows, prudent fiscal policy and significant financing for capital investments provided in the next year’s Budget will help sustain the growth momentum.
• India’s Performance: 
  • India’s performance has been quite impressive. For this year, India will retain a high growth rate, 6.8% for the year that ends in March. 
  • For FY 2023/24, (April 2023 to March 2024) IMF projected 6.1%, a bit of slowdown like the rest of the world economy, but way above the global average.. 
  • India remains a bright spot at a time when the IMF is projecting 2023 to be difficult with global growth slowing down from 3.4% last year to 2.9% in 2023.

Why is India a bright spot? 

• Digitalisation: It has done really well to turn the digitalisation that has been already moving quite well into a major driver of overcoming the impact of the pandemic and creating opportunities for growth and jobs.
•  Fiscal Policy: India’s fiscal policy has been responsive to economic conditions. The new Budget presented signals the commitment to fiscal consolidation, while at the same time provides significant financing for capital investments. 
• Learning the lessons from the pandemic:India didn’t shy away from learning the lessons from the pandemic and to implement very strong policies to overcome what has been really a difficult time for a number of months.

 News Source: The Hindu