Krishnamurthy V Subramanian, India’s top economist and Executive Director at the International Monetary Fund (IMF), highlighted the growing global confidence in India’s economic future. In an interview, he praised India’s public digital infrastructure and its focus on inclusive growth.
Subramanian noted India’s steady post-COVID growth rate of 7%, despite recent slowdowns due to reduced capital expenditure, election cycles, and weaker exports. He expects these challenges to be temporary.
“From my perspective at the IMF, the world is bullish on India,” Subramanian stated, emphasizing the global admiration for India’s digital transformation and policy innovation.
Unique Pandemic Response
India’s economic strategy during the COVID-19 pandemic stood out globally. While other nations treated it as a demand-side issue, India adopted a balanced approach, addressing both demand and supply. This led to controlled inflation compared to advanced economies grappling with soaring prices.
“India’s inflation during this period was below its historical average, a testament to responsible fiscal policies,” Subramanian said.
Productivity and Innovation Growth
Subramanian referred to the fact that India’s total factor productivity growth has more than doubled from 1.3% per annum between 2002 and 2013 to 2.7% since 2014. This productivity gain has been matched by a spurt in new business formation, making India the world’s third-largest entrepreneurial ecosystem.
Besides, innovation capabilities have been recognized as India’s rank in global innovation jumped from 85 in 2015 to 39 in 2024, and the ease of doing business ranking rose from 140 in 2014 to the 60s.
These improvements reflect the vibrancy and structural reforms driving the economy since 2014,” he said. In his book India@100, Subramanian estimated that by 2047, India would be a $55 trillion economy. He said that speeding up growth in the manufacturing sector is urgently needed now because it is the only pro-employment and inclusive way to grow.
He also advocated a shift in societal perception about the generation of wealth. “The creation of wealth is paramount in creating jobs,” explained Subramanian, urging India to adopt entrepreneurship as the means to economic prosperity.
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Source: Moneycontrol
News Desk
