Gita Gopinath, the first Deputy Managing Director of the International Monetary Fund (IMF), recently discussed India's economic role and challenges in an exclusive interview with India Today's News Director Rahul Kanwal.
She stated that India currently contributes about 15 percent to the global GDP and projected that India would become the world's third-largest economy by 2027-28 based on current forecasts. Gita emphasized India's role as an "engine of global growth" but highlighted the need for sustained high growth through structural reforms.
According to Gita, India's expected growth rate for the current fiscal year is over six percent, driven by public investment and resilient consumer spending. She stressed the importance of attracting private investments to increase per capita income and maintain high growth levels. To foster an environment for private investment, she emphasized the necessity of continued public infrastructure investments.
Gita noted that only a few Indian states, including Maharashtra, Karnataka, Gujarat, and Delhi, receive substantial foreign direct investment, suggesting that more needs to be done at the state government level. Other areas needing improvement, as per her assessment, include ease of doing business, education, and female labor force participation.
She also pointed out that India excels in digital infrastructure, setting an example for other nations. India's progress in this area has resulted in innovation, fiscal efficiency, enhanced revenue collection, and formalization of the economy, making it a global leader in digital infrastructure.
Regarding China's economy, Gopinath acknowledged that it has slowed down but believes that China possesses the resources to recover. She suggested that China could achieve the government's 5 percent growth target but projected medium-term growth at around 3.4 percent.
Discussing India's G20 presidency, Gita highlighted the unanimous adoption of a leader's declaration, which she deemed a significant achievement. She praised the work done on crypto regulation, debt issues, and multilateral development bank financing during India's presidency.
Notably, she mentioned the successful debt restructuring for Zambia and the consensus on globally enforceable regulations for crypto assets. Gita emphasized that crypto assets like Bitcoin should not become legal currencies, as they could affect monetary sovereignty. The regulations aim to ensure licensing and registration of crypto asset issuers, with a flexible approach considering country-specific circumstances. Additionally, the G20 Summit brought together regulatory and macro-financial stability aspects of crypto assets for the first time, promoting broad principles for their regulation.