Kolkata: Chief Economic Advisor (CEA) to the government V Anantha Nageswaran mentioned that India is in a stable situation and the growth momentum is good in spite of the multiple crises taking place simultaneously and getting entangled with each other.
The CEA said that the world is currently experiencing a "polycrisis," which is characterised by multiple crises of high inflation, tighter monetary policy, high interest rates, slowdown in China that has disrupted the global supply chain, and the Russia-Ukraine war.
"The difficulties the nation is dealing with are unlike anything seen since World War II. However, India is in a stable condition, and its economic growth is strong. Despite a high inflation rate of 7.4%, India would have a growth rate of 6.5% to 7% in 2022–2023, which is considered to be good "said he.
According to Nageswaran, India currently needs to preserve macroeconomic stability, increase foreign exchange reserves and spend them wisely, and finance the trade deficit brought on by large crude oil imports. "High crude imports make it difficult for the nation to finance the trade deficit. The FDI flow is consistent, but portfolio investments have increased in volatility as the USD has become more appealing due to high interest rates in the US "Added he.
The CEA said that even though India's economy has grown to be the fifth-largest in the world, the nation's per capita income still has to rise. Nageswaran said, there are indicators that investments are ramping up as well as signs of a revival in the formal sector's employment. He added that the NPS of lenders has also decreased. "The balance sheets of banks and corporates look healthier and are trimmed and not bloated," he said. Banks are currently making loans, and credit is growing at a rate of 17%, he said.
In the recent past, he said, the MSME sector had received targeted assistance in the form of credit guarantees, and various government programmes, such as the PM Garib Kalyan Yojana, had guaranteed social stability in the nation. After 20 years, privatisation has, according to Nageswaran, returned to policymakers' vocabulary. "After 20 years, privatisation has returned to the policy framework. It will take some time because it is still a work in progress. Many parties involved are uncomfortable with it. Unlocking enterprise efficiency is necessary, and the states must also get involved" he added.
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