International Monetary Fund (IMF) Once again, India has received a pat on the back. A senior IMF official said India remains the fastest growing economy in the world and the country’s economic fundamentals are good. Krishna Srinivasan, director of the IMF’s Asia Pacific Department, said India remains the world’s fastest growing economy. We forecast seven per cent growth in fiscal year 2024-25, supported by a recovery in rural consumption as harvests have been favourable. Despite some fluctuations, inflation is expected to decline to 4.4 per cent in the 2024-25 financial year due to normalization of food prices. In terms of other fundamentals, he said, fiscal consolidation is still underway despite the election. The condition of the ‘Reserve’ is quite good. Macroeconomic fundamentals are generally good for India.
India will have to emphasize job creation
He suggested that the country’s reform priorities after the elections should focus on three areas. He said that firstly, there are many questions regarding employment generation in India. In this context, I believe it is important to implement the labor codes agreed in 2019-20, as they will provide an opportunity to strengthen labor markets while providing social protection to workers. He said, secondly, that if you want to be competitive you have to eliminate some trade restrictions, 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 be removed.
We will have to focus on agrarian reforms.
And finally I would say to continue with the reforms, Srinivasan said. Strengthen infrastructure, whether physical infrastructure or digital infrastructure. This is an important achievement and will continue to do so. However, I would say that beyond this, we must focus on agriculture and land reforms. You should think about strengthening your education and skills. Srinivasan highlighted the need to invest in the skills of the workforce and said that in an economy that can create many jobs in the service sector, it is important to have the right skills. Therefore, investing in education and training the workforce is very important,” Srinivasan said in response to a question, adding that strengthening the social safety net is another reform. Lastly, I will say that you will still see a lot of bureaucracy when you talk to people.
unemployment is a cause for concern
Improving the business environment will be an important aspect. “These are some of the reforms that I would give priority to.” She also expressed concern about the low participation of women in the country’s workforce and rampant unemployment among youth. The director of the Asia Pacific Department said: “There is a lot of data in this context, but we can all agree that women’s participation in the labor force is low and youth unemployment is very high.” Therefore, emphasis should be placed on improving the conditions for job creation.
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