The Aryavarth Express
Agency(New Delhi): Krishnamurthy Venkata Subramanian, serving as India’s executive director at the International Monetary Fund (IMF), underscored the necessity for India to maintain a consistent growth rate of 8% to adequately generate employment opportunities, thereby diminishing poverty and inequality levels within the country. This assertion came amidst India’s economy surging by an impressive 8.4% in the last quarter of 2023, marking the quickest growth rate witnessed in over eighteen months.
During a discourse facilitated by the OMI Foundation, Subramanian highlighted the imperative for India to not only maintain but strive to exceed a 7% growth trajectory, considering the significant infrastructural developments and job market expansion required to uplift the nation’s socio-economic status. The observed growth during the October-December quarter not only surpassed prior years’ averages of 7.6% but also raised projections for the fiscal year ending March 2024 to 7.6%, as per the National Statistical Office (NSO).
Furthermore, the Reserve Bank of India (RBI) anticipates a GDP growth of 7% for the forthcoming financial year, buoyed by an increase in household consumption and a revival in private sector capital expenditure. Subramanian, however, critiqued India’s emulation of Western economic models, specifically the goals to limit fiscal deficits to 3% and reduce the debt-to-GDP ratio below 66%. He argued that such benchmarks might not be entirely suitable for the Indian context, given the nation’s unique economic and infrastructural needs.
Additionally, Subramanian pointed out India’s global standing with the third-largest platform economy, trailing only behind the United States and Europe. He questioned the origin and applicability of the Fiscal Responsibility and Budget Management (FRBM) framework’s recommendations for India, which advocate for a debt-to-GDP ratio below 66% and a fiscal deficit target of 3%. These guidelines, he noted, were drawn from the Maastricht Treaty of 1991—a pact aimed at fostering political and monetary union in Europe, suggesting that the economic conditions and requirements of India vastly differ from those of Western nations, which have largely addressed their infrastructural needs and eradicated absolute poverty.