MARRAKECH: Finance minister Nirmala Sitharaman on Thursday said domestic consumption and investment will drive India’s growth, but cautioned against possible inflationary pressures due to global and regional uncertainties, which will require the government and the Reserve Bank of India to constantly remain vigil.
Addressing the meeting of the World Bank’s development committee the minister also said external sector needed a “closer watch” as goods exports have been affected due to the slowdown in global demand, and there may be a need to strengthen it. “Services exports continue to do well and are likely to continue doing so as the preference for remote working remains unabated, typically manifested in the proliferation of Global Capability Centres,” she said.
Goods exports have contracted for seven months in a row, while imports have fallen for eight consecutive months, helping narrow the trade deficit. Trade data for September is due to be released on Friday. The government and RBI expected the Indian economy to expand by around 6.5% this year, although the World Bank and IMF have projected 6.3% growth, with both the agencies suggesting that India remains a bright spot.
Sitharaman told World Bank gathering that healthy balance sheets of the private sector and government capex were helping “crowd in” private investment. “Given the importance of private investment in accelerating economic growth, the government has been making various attempts to raise investment by the private sector. The Production-Linked Incentive scheme is providing capital expenditure-linked incentives to 14 key sectors. PM Gatishakti scheme, coupled with National Infrastructure Pipeline , is expected to encourage private-sector participation in creating new infrastructure…”
MDB reforms: FM backed reforms of World Bank but underlined the need for capital enhancement to support bigger mandate. “… it is an inescapable truth that we need to look beyond BSO (balance sheet optimisation) measures and consider all options, including an IBRD (International Bank for Reconstruction and Development, which provides loans and guarantees) capital increase to avoid the situation of an unfunded but enhanced mandate for the Bank,” she said, while pointing to the recommendations of the independent expert group.
Addressing the meeting of the World Bank’s development committee the minister also said external sector needed a “closer watch” as goods exports have been affected due to the slowdown in global demand, and there may be a need to strengthen it. “Services exports continue to do well and are likely to continue doing so as the preference for remote working remains unabated, typically manifested in the proliferation of Global Capability Centres,” she said.
Goods exports have contracted for seven months in a row, while imports have fallen for eight consecutive months, helping narrow the trade deficit. Trade data for September is due to be released on Friday. The government and RBI expected the Indian economy to expand by around 6.5% this year, although the World Bank and IMF have projected 6.3% growth, with both the agencies suggesting that India remains a bright spot.
Sitharaman told World Bank gathering that healthy balance sheets of the private sector and government capex were helping “crowd in” private investment. “Given the importance of private investment in accelerating economic growth, the government has been making various attempts to raise investment by the private sector. The Production-Linked Incentive scheme is providing capital expenditure-linked incentives to 14 key sectors. PM Gatishakti scheme, coupled with National Infrastructure Pipeline , is expected to encourage private-sector participation in creating new infrastructure…”
MDB reforms: FM backed reforms of World Bank but underlined the need for capital enhancement to support bigger mandate. “… it is an inescapable truth that we need to look beyond BSO (balance sheet optimisation) measures and consider all options, including an IBRD (International Bank for Reconstruction and Development, which provides loans and guarantees) capital increase to avoid the situation of an unfunded but enhanced mandate for the Bank,” she said, while pointing to the recommendations of the independent expert group.
