https://sputniknews.in/20240531/india-well-placed-to-tackle-economic-challenges-amid-global-headwinds-7498837.html
India Well-Placed to Tackle Economic Challenges Amid Global Headwinds
India Well-Placed to Tackle Economic Challenges Amid Global Headwinds
Sputnik India
Despite various global headwinds, India’s economic growth has been resilient and on an upward trajectory. This is evident as various reports suggest India’s GDP growth in 2024 will reach seven percent.
2024-05-31T21:28+0530
2024-05-31T21:28+0530
2024-05-31T21:34+0530
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Although India's economy is on a growth trajectory, the global headwinds pose some challenges. Talking about this, Dr Manish Gupta, associate professor, National Institute of Public Finance and Policy (NIPFP), told Sputnik India that several issues like the Russia-Ukraine conflict, disruptions in sea routes and others have affected the global economy, as commodities prices have increased due to disruption in supplies. Despite the inflation nonetheless the Indian economy has been resilient.The incumbent government has vowed to take the country to third spot in the global economic order, after India overtook United Kingdom to become fifth-largest economy in the world in September 2022.Since then, in the last three-four years the focus of the country has been towards creation of capital infrastructure not only at the state level, but at the central level too, Gupta added.This, according to him, would give a thrust to growth, create more employment opportunities, and thereby provide "more money in the pockets of the people for spending", and hence boosting the economy.Economic Growth to Continue if Modi RepeatsHe explained that India’s economic progress of Bharatiya Janata Party (BJP) is likely to continue in the third term too, as the interim budget presented by the finance minister was not a population-focused budget, rather the focus was on fiscal prudence: beating fiscal targets, fiscal consolidation, and spending more on capital.Meantime, the manifesto launched by BJP for the 2024 Lok Sabha elections promises the five-year plan to overcome economic challenges.Gupta believes that amid the global headwinds as policy analysts have predicted that Indian economic growth will be 7.1-7.4 percent in 2024 and inflation would be around 5 percent.Meantime, the country is very well placed to address the above outlined challenges because of its robust and strong fundamentals – inflation is not very high, also the state's policies are moving in the right direction, Dr Gupta underscored, citing the "Make in India" programme, which aims to boost the country's manufacturing sector.Gupta highlighted at the same time that this is not a first the party has promised economic growth for the country – rather, the focus is a continuation of the previous two terms.There was a gradual decline in the country’s GDP numbers since Modi government took over in 2014, and in 2019-20 they were at their lowest, Dr Gupta claimed, noting however that there were a number of factors led to this.He added that in order to overcome this problem, the government provided a stimulus package, which meant spending more towards health and other sectors while states were allowed an additional two percent borrowing to be spent on creating capital infrastructure in the health sector, and so on, which could actually have an impact on the overall growth, because the multiplier of capital expenditure is much higher than that of revenue expenditure.Skill Upgrade Important for Better Use of AIIn the area of employment, before presenting the interim budget, the Finance Ministry in one of its reports, titled "The Indian Economy: A Review", said that the advent of artificial intelligence (AI) poses a severe threat because of the potential impact on the services sector.Talking about the impact of AI, Dr Gupta affirmed that although the technology has been cited as a threat to the economic growth, it will not have a major impact, as the deployment of AI won’t affect employment.However, he concluded that there could be an impact in the short run. But if AI is deployed in one place, then opportunities will be created in other place.
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india becomes fifth-largest economy of the world, india overtakes the united kingdom, india to become third-largest economy, bharatiya janata party, bjp's sankalp patra, national institute of public finance and policy, goods and services tax, gst, 'the indian economy: a review', artificial intelligence, india’s economic growth, russia-ukraine conflict, disruptions in the sea routes, make in india
india becomes fifth-largest economy of the world, india overtakes the united kingdom, india to become third-largest economy, bharatiya janata party, bjp's sankalp patra, national institute of public finance and policy, goods and services tax, gst, 'the indian economy: a review', artificial intelligence, india’s economic growth, russia-ukraine conflict, disruptions in the sea routes, make in india
India Well-Placed to Tackle Economic Challenges Amid Global Headwinds
21:28 31.05.2024 (Updated: 21:34 31.05.2024) Despite various global headwinds, India’s economic growth has been resilient and on an upward trajectory. This is evident as various reports suggest India’s GDP growth in 2024 will reach seven percent.
Although India's economy is on a growth trajectory, the global headwinds pose some challenges. Talking about this, Dr Manish Gupta, associate professor, National Institute of Public Finance and Policy (NIPFP), told Sputnik India that several issues like the Russia-Ukraine conflict, disruptions in sea routes and others have affected the global economy, as commodities prices have increased due to disruption in supplies. Despite the inflation nonetheless the Indian economy has been resilient.
The incumbent government has vowed to take the country to third spot in the global economic order, after India overtook United Kingdom to become fifth-largest economy in the world in September 2022.
Since then, in the last three-four years the focus of the country has been towards creation of capital infrastructure not only at the state level, but at the central level too, Gupta added.
This, according to him, would give a thrust to growth, create more employment opportunities, and thereby provide "more money in the pockets of the people for spending", and hence boosting the economy.
Economic Growth to Continue if Modi Repeats
He explained that
India’s economic progress of
Bharatiya Janata Party (BJP) is likely to continue in the third term too, as the interim budget presented by the finance minister was not a population-focused budget, rather the focus was on fiscal prudence: beating fiscal targets, fiscal consolidation, and spending more on capital.
Meantime, the manifesto launched by
BJP for the
2024 Lok Sabha elections promises the five-year plan to overcome economic challenges.
"In the next five years, we will take our nation into the top 3 economies of the world, launch a final and decisive assault against poverty, open up newer avenues of growth in various sectors, further intensify our battle against corruption, unveil the next generation of reforms, and take a number of pro-people decisions and actions", Prime Minister Narendra Modi said in a letter to the nation at the beginning of the party’s manifesto titled "Sankalp Patra".
Gupta believes that amid the global headwinds as policy analysts have predicted that Indian economic growth will be 7.1-7.4 percent in 2024 and inflation would be around 5 percent.
Meantime, the country is very well placed to address the above outlined challenges because of its robust and strong fundamentals – inflation is not very high, also the state's policies are moving in the right direction, Dr Gupta underscored, citing the "Make in India" programme, which aims to boost the country's manufacturing sector.
Gupta highlighted at the same time that this is not a first the party has promised economic growth for the country – rather, the focus is a continuation of the previous two terms.
There was a gradual decline in the country’s GDP numbers since Modi government took over in 2014, and in 2019-20 they were at their lowest, Dr Gupta claimed, noting however that there were a number of factors led to this.
"There were many reasons behind it, like the introduction of the Goods and Services Tax (GST) and then COVID, which not only affected revenues of the states and the federal government, but expenditures, growth, and everything", Dr Gupta mentioned.
He added that in order to overcome this problem, the government provided a stimulus package, which meant spending more towards health and other sectors while states were allowed an additional two percent borrowing to be spent on creating capital infrastructure in the health sector, and so on, which could actually have an impact on the overall growth, because the multiplier of capital expenditure is much higher than that of revenue expenditure.
Skill Upgrade Important for Better Use of AI
In the area of employment, before presenting the interim budget, the
Finance Ministry in one of its reports, titled "The Indian Economy: A Review", said that the advent of artificial intelligence (AI) poses a severe threat because of the potential impact on the services sector.
Talking about the impact of AI, Dr Gupta affirmed that although the technology has been cited as a threat to the economic growth, it will not have a major impact, as the deployment of AI won’t affect employment.
"In order to derive from AI, it is important for the people especially in the services sector to upgrade their skills, because AI without human intervention can’t benefit all the sectors," the professor stated.
However, he concluded that there could be an impact in the short run. But if AI is deployed in one place, then opportunities will be created in other place.
