India's Inclusive Growth Applauded Globally, Says IMF's K Subramanian

India’s public digital infrastructure and focus on inclusive growth are receiving widespread praise globally, according to Krishnamurthy V Subramanian, Executive Director at the International Monetary Fund (IMF).

The former Indian Chief Economic Advisor and author of India@100 highlighted the country's strong economic performance, despite recent challenges. "I think the Indian economy has been growing overall very well. Post-COVID, the growth rate has consistently been seven per cent. Of course, there's been a little bit of a dip this quarter. Partly it is because of the slowdown in capital expenditures. That itself is because of some of the election cycles. Also, there's been some impact on exports. But I expect this dip to be temporary," Subramanian stated.

Subramanian, speaking from his position on the IMF board, emphasized global confidence in India’s future. "From the vantage point that I've been sitting on the IMF board, I have no hesitation in saying the world is bullish on India. The kind of public digital infrastructure that India has enacted, is something that almost every one of my board colleagues often finds a mention. They mention it with sincere appreciation. Apart from that, the kind of inclusive growth that India has pursued over the last decade is also something that comes up for appreciation."

He also discussed India’s distinctive economic approach during the COVID-19 pandemic. While the global response was largely focused on demand-side policies, India took a broader view. "India during Covid chose to implement an economic policy that was different from the rest of the world. While the rest of the world identified COVID as purely a demand-side shock, India was the only large economy to diagnose COVID as both a demand-side and a supply-side shock," he explained.

This policy mix helped India mitigate the effects of global disruptions, such as the ongoing war in Europe. "Therefore, India implemented a judicious mix of demand and supply-side policies, spent judiciously but making sure that it reached those that were generally impacted by the pandemic," he added. Subramanian noted that as a result, India faced less severe inflationary pressure compared to other nations impacted by supply-side issues.