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India’s share of  economic growth  to rise  to  18  per  cent

By  Our  Financial  Correspondent

Mumbai,  Oct  23  (IVC)    India’s  contribution  to  global economic growth  would  rise   by two  per  cent points   in five  years as  the  Indian economy  is  projected  to  grow faster  in the  coming  years, a senior  International  Monetary Fund (IMF)  official   said here  on October 17.

                “Currently China and India’s  contribution  to global growth  is  50  per  cent, said  Krishna Srinivasan,  Director, IMF, Asia  and Pacific  Department .  “Out  of  this  India’s  contribution  is 16  per  cent and  the rest by  China.   This  16  per  cent contribution  from  India  will  grow to  18  per  cent in the  next  five  years”, Srinivasan said.

                Observing  that  the Asia  Pacific  region remained  a relatively bright spot despite  a challenging global environment,  he added that  the  region’s economy  was expected  to  grow by  4.6  per  cent in 2023 and by 4.6  in  2024,  putting  it  on track to  contribute  about  two-thirds  to  global  growth.

                “Growth  in India  remains strong” he said. ”We  are projecting growth  for  the  Financial  Year  2023-24 at  6.3 per  cent  supported  by  strong  government  expenditure wit  some crowding in  for  private sector investment,  along  with continued consumption  growth  and  despite weakening external demand”,  he  asserted.

                Stating  that  India’s retail inflation was moderating   he  said, “after  sharp  increase  in price in tomatoes  and  other vegetables  in the  summer,  headline  inflation  has  resumed  its  downward trend  and  has returned within the  RBI’s tolerance band”, he  added.

                Srinivasan said  India’s  government  was likely  to  meet its  5.9 per  cent  fiscal  deficit  target in the  fiscal  2024.   Revenue  is  expected  to  reach  budgeted levels.  There  is  some  pressure on  expenditure , with  higher-than-budgeted expenditure expected in  some  areas (such  as additional LPG subsidy for  the  poor,  higher MNREGA expenses)”,  Srinivasan added.

“At  this  stage  we  see  room  in  the  budget  to  absorb  these  unexpected increases.  State governments’ deficit is  expected  to  be  2.8  per cent of  GSDP, below  the deficit  target of  3  per cent in line  with past  budget execution”, he  said.                 The  IMF  has  asked countries to  retain  a  sufficiently  restrictive monetary  stance until  inflation is  firmly on  track,  Srinivasan added.

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