India: No prospect of recession in India, economy expected to grow 6-7% in next fiscal year: Former Niti Aayog VC Rajiv Kumar

As the world heads into recession, former Niti Aayog VP Rajiv Kumar has said that India will continue to grow by 6-7% in the next fiscal year 2023-24.

“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. .

Kumar further said that there is a synchronized slowdown in the United States, Europe, Japan and also China and this could push the global economy into a recession in the coming months.

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 in the 6-7% range for some time to come.

“After that, my guess is it should start to peak and then come back down,” he said.

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 USD 56.69 billion due to increased 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 system (OPS), 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 maturing 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,” Kumar said.

Punjab’s cabinet on Friday approved the reinstatement of the old pension scheme, which was discontinued in 2004.

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 deteriorating l international environment, while the IMF predicted a growth rate of 6.8% in 2022 against 8.7% in 2021 for India.

(with PTI entries)


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