Rajiv Kumar, former vice president of Niti Aayog. File | Photo credit: Sandeep Saxena
India will continue to grow by 6% to 7% in the next fiscal year 2023-24, although the economy may be affected by uncertain global conditions, former Niti Aayog vice chairman Rajiv Kumar has said. amid growing fears that the world is slipping into a recession.
Mr. Kumar further said that there was a synchronized slowdown in the United States, Europe, Japan and also China and that this could plunge the global economy into a recession in the coming months.
“Fortunately, there is no such prospect of recession in India because although our growth may be negatively affected by global conditions, we will still manage to grow at 6-7% in 2023-24,” he said. he told PTI in an interview. .
On October 6, the World Bank forecast a growth rate of 6.5% for the Indian economy for 2022-23, down one percentage point from its June 2022 projections, citing the deterioration of the international environment, while the IMF predicted a growth rate of 6.8% in 2022, compared to 8.7% in 2021 for India.
IMF chief Kristalina Georgieva said the global economy was moving from a world of relative predictability to one of greater uncertainty.
Responding to a question about high inflation, Kumar said retail inflation is likely to be around 6-7% for some time to come.
“After that, my guess is it should start to peak and then come back down,” he said.
Mr Kumar added that much depends on global oil prices as they may continue to rise due to the continuing conflict in Ukraine.
“But otherwise, the domestic engines of inflation will cool down,” he noted. Indicating an easing of the price situation, retail price inflation moderated to 6.7% in October, while the wholesale price index fell to its lowest level in 19 months, mainly in due to moderate food prices.
The central bank has a mandate to keep inflation at 4% with 2% upside and downside bands. Asked about the impact of the weakening Indian Rupee on the common man, former VP Niti Aayog said the common Indian does not use many imported goods or services in his shopping basket. consumption.
According to Kumar, the rupee which is close to its real value is much better for the economy than the appreciated rupee and the depreciated rupee does not pose much downside risk.
The Rupee depreciated 6 paise to close at 81.74 against the US Dollar on Friday.
Regarding India’s growing trade deficit, Kumar said that with negative export growth in October, it is clear that the country needs a real policy focus on how to increase its exports of goods and services.
“Now we need to formulate state-specific export promotion policies. Because having one export promotion policy for the whole country doesn’t make sense,” he said.
Elaborating further, he said that like Punjab, is a dual landlocked state and Tamil Nadu is a coastal state, and has centuries of trading experience. “So having the same policies of these two states, for example, is irrelevant,” he pointed out.
India’s exports entered negative territory after a gap of around two years, falling sharply by 16.65% to $29.78 billion in October, mainly due to slowing global demand, even then the trade deficit widened to $26.91 billion.
Imports in the month under review increased by around 6% to $56.69 billion due to higher inbound shipments of crude oil and some raw materials such as cotton, fertilizers and machinery .
Responding to a question about some states moving to the old pension scheme (OPS), Mr Kumar said: “It’s a step backwards. And I don’t think it should be done.” He felt that it is advocated by some opposition parties due to populist measures.
“I think the Indian economy, the Indian working class, the Indian middle class are coming of age and can manage their own pension funds and take advantage of the new pension scheme, which has a lot more choice than the old pension scheme. “said Mr. Kumar.
Punjab’s cabinet on Friday approved the reinstatement of the old pension scheme, which was discontinued in 2004.