India’s economy is showcasing robust performance, largely driven by significant public investment, which has been a key factor in fueling growth. This is according to Gita Gopinath, the Deputy Managing Director of the IMF. However, she emphasized the need for India to implement further reforms to sustain this growth momentum and ensure adequate job creation.
Gopinath, who predicts that India will become the world’s third-largest economy by 2027, highlighted the importance of aligning this growth with sufficient job opportunities to ensure broad-based economic benefits. Speaking at an event at the Delhi School of Economics, her alma mater, she remarked on the long-term benefits of fiscal consolidation, noting that while reducing the fiscal deficit in the short term might have some negative effects, it is crucial for maintaining economic stability. She underscored that without proper checks on fiscal policies, countries risk facing crises.
Her comments echoed Finance Minister Nirmala Sitharaman’s recent move to reduce the fiscal deficit to 4.9% of GDP in the 2024-25 Budget. This reduction is part of a broader strategy to stabilize the economy by keeping inflation under control and reducing government borrowing. By doing so, more funds would be available in the banking system for businesses to borrow, driving further investment, growth, and job creation.
Additionally, Gita Gopinath strongly advocated for greater female representation in leadership roles, urging women to harness their inner strength to rise to the top. She pointed out the progress made so far, noting that it was once unimaginable for the IMF’s Managing Director to be a woman, yet both the current and previous leaders of the IMF are women. Despite this progress, she stressed the critical need for more women to occupy leadership positions worldwide.
