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The International Monetary Fund (IMF) has once again patted India on the back. A senior IMF official said that India remains the fastest growing economy in the world and the country’s economic fundamentals are good. Krishna Srinivasan, Director of the Asia Pacific Department at the IMF, said India remains the world’s fastest growing economy. We forecast seven per cent growth in FY 2024-25, supported by a recovery in rural consumption as crops have been favourable. Despite some fluctuations, inflation is expected to decline to 4.4 percent in financial year 2024-25 due to normalization of food prices. In terms of other fundamentals, he said, fiscal consolidation remains on track despite the elections. The condition of ‘Reserve’ is quite good. The macro fundamentals are generally good for India.
India will have to emphasize on employment generation
He suggested that the country’s reform priorities after the elections should be in three areas. He said, first of all, there are many questions regarding employment generation in India. In this context, I feel it is important to implement the labor codes agreed in 2019-20, as they will provide an opportunity to strengthen labor markets while providing social protection to workers. He said, secondly, if you want to be competitive, you have to remove some trade restrictions, because when you liberalize trade, you allow productive companies to survive. There is more competition and it can create jobs. I think it’s important that more trade restrictions are removed.
Will have to focus on land reforms
And finally I would say continue with the reforms, Srinivasan said. Strengthen infrastructure, whether it is physical infrastructure or digital infrastructure. This is an important achievement and it will continue with this. However, I would say that going beyond this you have to focus on agriculture and land reforms. You need to think about strengthening your education and skills. Emphasizing the need to invest in the skills of the workforce, Srinivasan said, in an economy that can create a lot of jobs in the service sector, having the right skills is important. So, investing in education, skilling the labor forces is very important,” Srinivasan said in response to a question, adding that strengthening the social safety net is another reform. Lastly, I will say that you will still see a lot of red tape when you talk to people.
unemployment a matter of concern
Improving the business environment will be an important aspect. These are some of the reforms that I would give priority to.” He also expressed concern over the low participation of women in the country’s labor force and rampant unemployment among the youth. Director of the Asia Pacific Department said, “There is a lot of data in this context, but we can all agree that women’s participation in the labor force is low and youth unemployment is very high.” Therefore, emphasis should be laid on improving the environment for employment generation.
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