Indian Economy – GDP of India: India’s economic growth is still in ‘very critical’ condition and it needs full support now. Jayant R Verma, a member of the Monetary Policy Committee (MPC) of the Reserve Bank of India, has said this. He told the news agency that private consumption and capital investment have not yet picked up pace, so the economic growth of the economy remains weak. He feared that India’s economy would not be able to register growth according to its aspirations and needs.
4 ‘engines’ to propel the economy
Jayant R Verma said that there are 4 ‘engines’ to take the economy forward. Two of these engine exports and government spending helped propel the economy during the pandemic. But now other engines need to take the ‘baton’ in their hands. He said that I think about 4 engines of growth of the economy. These are- exports, government spending, capital investment and private consumption.
Need for speed in private investment
Verma said that due to the slowness in the global economy, exports cannot remain the main factor of growth. At the same time, the government’s expenditure is also limited due to fiscal problems. The MPC member said that experts have been waiting for a long time for private investment to pick up. However, capital investment is being affected due to concerns about future growth prospects.
RBI has reduced the growth forecast
He said that the important question is whether the growth of the fourth engine i.e. private consumption will continue after the pent-up demand cools down in the coming months. Verma said that in view of these conditions, there is apprehension that economic growth is in a very critical condition and it needs full support. Earlier this month, the Reserve Bank of India has reduced the growth forecast for the current financial year (2022-23) from 7 to 6.8 percent.
No fear of recession in India
On the other hand, the World Bank has increased the estimate of the growth rate of Gross Domestic Product (GDP) to 6.9 percent. Professor Verma of the Indian Institute of Management-Ahmedabad (IIM-Ahmedabad), however, expressed confidence that like other countries of the world, India is not at risk of recession. He said that in fact the performance of Indian economy is better than other big countries.
2 years lost in epidemic
Verma said that the problem is that India’s aspiration level is high, especially considering that we have lost two years due to the pandemic. He said that there is a demographic advantage with India. In such a situation, there is a need for higher growth to provide employment opportunities to the youth joining the labor force. Verma said that I do not suspect that India will grow at a slower pace than the rest of the world. I am apprehensive that we will not be able to achieve growth according to our aspirations and needs.
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