India’s economy will stay on course despite global headwinds and is expected to grow by 7% in the 2022-23 financial year, Finance Minister Nirmala Sitharaman said, attributing this to the conducive domestic political environment and focus. on key structural reforms.
Sitharaman’s remarks came during his address to the plenary session of the International Monetary Finance Committee (IMFC) on Friday.
The meeting itself, she said, comes at a time when the global economic outlook is clouded by key downside risks: slowing growth in major economies, cross-border effects due to the current geopolitical situation, pressures inflationary induced food and energy price escalation that have had a negative impact on vulnerable economies.
“Despite the global headwinds, the Indian economy will stay on course and is expected to grow by 7% in the fiscal year 2022-23. This is the result of the favorable domestic political environment and the focus of the government on key structural reforms to boost growth,” she said.
She told IMFC members that the Indian government has taken initiatives to protect growth while continuing to manage inflation.
The government has ensured the availability of free food grains to more than 800 million vulnerable families over the past 25 months, through the country’s extensive public distribution network, she said.
Providing last mile financial services to the poor has been a key government priority and this has been facilitated by India’s digital public goods infrastructure.
“Today, India leads the world in digital payments innovation, with our transaction costs being the lowest in the world,” Sitharaman said.
Believing that the IMF must increase the resources available to emerging and low-income countries to protect the global financial system, Sitharaman stressed that the conclusion of the 16th General Quota Review (GRQ) by December 15, 2023 is vital. to increase voting rights. of emerging market economies (EMES) based on their relative positions in the global economy.
India’s quota in the IMF, which determines voting shares in the multilateral lending agency, is 2.75%. China’s quota is 6.4% and the United States’ quota is 17.43%.
A general review allows the IMF to assess the adequacy of quotas in relation to both members’ balance of payments financing needs and the Fund’s ability to help meet those needs.
Observing that a major downside risk to the global recovery is exacerbated debt overhang in many low-income countries, Sitharaman said it was therefore important for the IMF to provide the necessary support to address balance-related vulnerabilities. payments.
As such, she welcomed the IMF’s recent initiative of a new food shock window to help countries address food insecurity.
On climate change, she stressed the importance of a multilateral approach based on the principles of equity, common but differentiated responsibilities and respective capabilities.
India has set an ambitious course for climate action through its updated Nationally Determined Contributions which demonstrate India’s commitment at the highest level to decoupling economic growth from greenhouse gas emissions. tight.
“The transfer of climate finance and low-cost climate technologies from developed to developing countries has become critically important,” Sitharaman said.