Home / Economy / India to grow at moderately brisk rate in coming years: finance ministry

NEW DELHI : India is well placed to grow at a “moderately brisk rate" in the coming years on the back of macroeconomic stability, the Department of Economic Affairs said in its Monthly Economic Review for October 2022 on Thursday.

“In a world where monetary tightening has weakened growth prospects, India appears well-placed to grow at a moderately brisk rate in the coming years on account of the priority it accorded macroeconomic stability," it said.

Also, continued macroeconomic stability of which fiscal prudence is a part and execution of various path-breaking policies such as Gati Shakti, National Logistics Policy and the Production-Linked Incentive schemes to boost the manufacturing share of employment lend further upside to India’s growth prospects.

The report further said that the easing international commodity prices and new Kharif arrival are also set to dampen inflationary pressures in the coming months.

“So far in the current year, India’s food security concerns have been addressed and will continue to receive the utmost priority from the government," the finance ministry said.

The ‘Monthly Economic Review for October 2022’ also cautioned that the US monetary tightening in the United States has not yet resulted in a significant tightening of financial conditions in that country.

“That is a future risk. When that happens, global financial conditions will tighten. That could mean lower stock prices, weaker currencies and higher bond yields, resulting in higher borrowing costs for many governments around the world. In times such as this, the best contribution that governments make to economic growth is through policies that prioritise economic and financial stability, as India has demonstrated in the last two and half years," it stated.

The finance ministry report further said that a rapid deterioration in global growth prospects, coupled with high inflation and worsening financial conditions, has increased fears of an impending global recession.

On India’s exports businesses, it said, “Global slowdown may dampen India’s exports businesses outlook; however, resilient domestic demand, a re-invigorated investment cycle along with strengthened financial system and structural reforms will provide impetus to economic growth going forward.“

India’s exports entered negative territory after a gap of about two years, declining sharply by 16.65% to $29.78 billion in October, mainly due to global demand slowdown, even as the trade deficit widened to $26.91 billion, as per the data released by the commerce ministry.

The ministry said, so far in current year, India’s food security concerns have been addressed and will continue to receive the utmost priority from the government.

“Easing international commodity prices and new kharif arrival are also set to dampen inflationary pressures in the coming months," it said.

Talking about hiring, the report said in India the recovery in economic activities across sectors has improved the overall employment situation in the country.

Net payroll additions in EPFO have witnessed double-digit growth in September 2022, reflecting improved formalisation of the economy.

“Hiring by firms is likely to witness an improvement in upcoming quarters driven by a rebound in new business hiring as firms continue to benefit from the lifting of the COVID-19 restrictions and optimism engendered by the vigorous sales volumes experienced during the festive season," the ministry said.

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