‘India remains the fastest growing economy in the world’- IMF

New Delhi| According to a senior official of the International Monetary Fund (IMF), India remains the fastest growing economy in the world and the country’s macroeconomic fundamentals are good. ‘‘India, remains the fastest growing economy in the world”, Krishna Srinivasan, director of the Asia Pacific department at the IMF, said in an interview.

Krishna Srinivasan said that we are projecting a growth of seven per cent in FY 2024-25, which will be supported by the improvement in rural consumption as crops have been favorable. Inflation is expected to decline to 4.4 percent in FY 2024-25 despite some fluctuations as food prices normalize.’’

Regarding other fundamentals, he said, ‘‘, the fiscal situation is better despite the elections. ‘forex reserve’ position is quite good. Large fundamentals in general are good for India.’’

He suggested that the country’s reform priorities after the elections should be in three areas. He said, firstly, many questions are raised regarding employment generation in India. I think it is important to implement the Labor Codes approved in 2019-20, because they will give workers a chance to strengthen labor markets while providing social protection.’’

He said, ‘‘the second thing is that if you want to be competitive, you have to remove some restrictions on trading… Because when you liberalize trade, you allow productive companies to survive. There is more competition and it can create jobs. I think it is important that more trade restrictions are lifted.’’

Srinivasan said, ‘‘and finally I would say continue the reforms… Strengthen infrastructure, be it physical infrastructure or digital infrastructure. This is an important achievement and it will continue with it. However, going forward you will have to focus on agriculture and land reforms. You have to think about strengthening education and skills.’’

Emphasizing the need to invest in the skills of the workforce, Srinivasan said, ‘‘India is an economy that can create a lot of jobs in the service sector, for this it is important to have the right skills. Therefore, it is very important to invest in education, to make labor forces efficient.’’

Responding to a question, Srinivasan said, strengthening the social security system is also an improvement. You’ll still see a lot of things like red tape when you talk to people. Improving the business environment will be the key aspect. These are some of the improvements I would prefer.’’ He also expressed concern at the low participation of women in the country’s labour force and the unemployment prevailing among the youth.

The Director of the Asia Pacific Department said, ‘‘many figures exist, but we all agree that women’s participation in the labor force is low and unemployment among youth is quite high. Emphasis must therefore be placed on improving the climate for job creation.”