Despite global economy experiencing several challenges, including the Russia-Ukraine conflict, the slowdown in China, persistently high inflation and tightening financial conditions, India continues to be one of the fastest growing economies in the world, sources in the Finance Ministry have said.
As per the World Economic Outlook (WEO) October 2022 report of the IMF, the economies around the world were facing recessionary trends due to the aforementioned reasons.
The slowdown of global output had also made IMF lower the growth forecast for India's economy, sources informed, adding that domestic economy was projected to grow 6.8 per cent in 2022 and 6.1 per cent in 2023.
However despite this, the government is of the opinion that India's economy was better off than many globally.
The WEO report also said that geopolitical factors were weighing heavily on global growth, especially in advanced economies.
Owing to these unfavourable developments, the IMF had projected global growth to slow from 6 per cent in 2021 to 3.2 per cent in 2022 and 2.7 per cent in 2023.
For advanced economies, the growth was projected to decline from 5.2 per cent in 2021 to 2.4 per cent in 2022 and 1.1 per cent in 2023.
The corresponding growth for emerging market and developing economies had been projected at 3.7 percent in 2022 and 2023, down from 6.6 per cent in 2021.
Sources in the Finance Ministry said that several measures had been taken to stabilise economic growth.
In the Union Budget 2021-22, increase in capex budget by 34.5 per cent over 2020-21 was announced.
The expansion of the production linked incentive (PLI) scheme to 14 sectors and introduction of Mega Investment Textile Parks (MITRA) were announced.
Other major reforms were also introduced to promote domestic manufacturing, including national monetisation pipeline of public sector assets, privatisation of public sector banks and insurance companies, reforms-based result-linked power distribution sector scheme, increasing of FDI in insurance sector from 49 per cent to 74 per cent, and rationalisation of custom duties.
In the Union Budget 2022-23, the capex budget was again increased by 35.4 per cent over the previous year, 'PM Gati Shakti' was launched for integrated planning of infrastructure and synchronised project implementation across all concerned central ministries, departments and state governments, and emergency credit line guarantee scheme was extended to provide continued support to MSMEs, among others.