We do not estimate India’s GDP growth rate to be 8%: IMF

• IMF Executive Director and India’s Representative: Personal Opinion of IMF Krishnamurthy Subramaniam
• IMF has given up on India’s growth projections
  
• Our estimate of India’s growth till January was 6.5 percent
  

The International Monetary Fund (IMF), while clarifying on the estimate of Indian economy growing at the rate of 8 percent by 2047, has said that this figure is not our official figure. Rather, this is the personal opinion of IMF Executive Director and India’s representative Krishnamurthy Subramaniam.

IMF spokeswoman Julie Kozak said Subramaniam’s views were informed by his role as India’s representative to the IMF. Subramaniam is a member of the executive board, an IMF spokesperson said. The Board is composed of Executive Directors, who are representatives of the countries. They are not part of the IMF staff. Their work is different from that of IMF. He said that our estimate of India’s growth till January was 6.5 percent. Forecasts will be presented again in a few weeks.

What is the whole matter of this?

Subramanian said that the Indian economy can grow at the rate of 8 percent till 2047. If this pace continues, India can become a 55 trillion dollar economy by this period. However, this is possible only if the country can double down on the good policies implemented in the last 10 years and accelerate reforms. Subramaniam said the 8 percent growth rate is aspirational as India has not been able to grow consistently at this pace in the past, but it is achievable.

economic pace better than expected

The Indian economy grew at a better-than-expected 8.4 percent rate in the last three months of 2023. This is the fastest pace of GDP growth in the last one and a half years. Based on the growth rate of October-December, the growth rate estimate for the current financial year has been increased to 7.6 percent.

These areas need improvement

India’s executive director at the IMF also said that reforms are needed in the land, labour, capital and logistics sectors. There is a need for improvement in the manufacturing sector. Along with this, attention will also have to be paid to improving the banking sector to provide loans to the manufacturing sector.

Emphasis will be laid on employment generation, consumption will increase

Subramaniam said that historically since 1991, India’s average economic growth rate has been a little more than 7 percent. India needs to strengthen its economy as about 58 percent of the country’s GDP comes from domestic consumption. So, you know… we have the capability. If we can create enough jobs by encouraging the manufacturing sector, it will lead to more consumption.