IMF Commends India's Fiscal Discipline Amidst Election Year

IMF lauds India: The International Monetary Fund (IMF) lauds India for maintaining fiscal discipline even amid an election year. According to Krishna Srinivasan, Director of the Asia and Pacific Department at the IMF, India's economy continues to thrive, standing out as a global bright spot with a growth rate of 6.8 per cent and a downward trend in inflation.

Highlighting the significance of fiscal responsibility, Srinivasan notes that India has effectively navigated multiple economic shocks and emerged as one of the fastest-growing major economies globally. Despite being an election year, the government's commitment to fiscal discipline is particularly noteworthy, underscoring the importance of sound macroeconomic fundamentals for sustainable growth.

India's robust economic outlook for the fiscal year 2024-25 is projected at 6.8 per cent growth, driven by private consumption and public investment. Srinivasan emphasizes the resilience of India's macro fundamentals, citing a decline in inflation and strong reserve positions as indicators of economic strength.

While acknowledging risks such as volatile commodity prices and geopolitical tensions, Srinivasan also highlights potential upside factors such as stronger private consumption and increased capital expenditure. He emphasizes India's significant contribution to global growth, with the country projected to account for 17 per cent of global economic expansion.

Furthermore, Srinivasan identifies key drivers of India's economic success, including its digital public infrastructure (DPI) and youthful population. He underscores the importance of investing in education and healthcare to harness the demographic dividend effectively and ensure long-term growth.

With PTI inputs