THE International Monetary Fund (IMF) warned on Tuesday that it expects the Indian economy to decelerate next fiscal year, with growth falling to 6.1 percent from 6.8 percent in the current fiscal year. Terming India a bright spot, the fund announced the January update to its World Economic Outlook on Tuesday, predicting that global growth will dip from an expected 3.4 percent in 2022 to 2.9 percent in 2023, then increase to 3.1 percent in 2024. On the other hand, according to the Economic Survey released by the government a day ahead of the Union Budget presentation, India’s economic growth is forecast to be 6.5 percent in fiscal 2024 compared to 7 percent in the current fiscal. The projection is by and large similar to the one provided by multilateral agencies such as the World Bank, the IMF, and the ADB and by the Reserve Bank of India domestically. The survey expects more foreign money to flow into India as advanced economies face “recessionary tendencies.” This, in turn, is projected to increase investment in the private sector.
One big factor contributing to rebound in India’s growth is the country’s quick recovery from the Covid pandemic, as also highlighted by the Economic Survey. This solid economic performance will underpin the finance minister Nirmala Sitharaman’s budget today, her fifth Budget since 2019. She is expected to change income-tax slabs to provide relief to the middle class. Besides, in an election year, the government is also expected to spend on the poor with programmes such as rural jobs.
The varied growth projections from multilateral agencies presents a stable picture of Indian economy. The ongoing war in Ukraine, however, remains a danger. If it drags on, the global economy, and with it, the Indian economy, is likely to come under severe stress again. Therefore it is incumbent on the world to come together to resolve the crisis in Ukraine and find a solution that addresses the concerns of all the parties involved. Otherwise, as prophesied by leading economists, the world is heading inexorably toward recession.
Prime Minister Narendra Modi said on Tuesday the world’s eyes were on India amid the prevailing global uncertainty. The budget, the PM added will attempt to meet the hopes and aspirations of the common citizen. So, not only the world’s but India’s eyes are also fixed on today’s budget.
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