Gopinath on guard1 min read . Updated: 21 Jan 2020, 02:58 PM IST
Gita Gopinath highlighted financial stress among shadow banks and poor growth in rural incomes as pain points
Gita Gopinath, as befits the chief economist of the International Monetary Fund (IMF), has always been guarded in what she says. So, when she said India needed investment and ought to encourage it, she was only stating the obvious. But wait, she was speaking to a TV channel in Davos, the Swiss resort where the World Economic Forum is holding its annual huddle of bigwigs, and in the context of the so-called snub India’s government gave Amazon.com chief Jeff Bezos on his visit to the country last week. This has sent some people scurrying to scan everything she’s said about India for signs of a political bias.
They will be disappointed. Earlier, while explaining the IMF’s snipping of growth forecasts of the global economy, she had attributed the revision to India’s outlook having turned gloomy, with its 2019 projection slashed from 6% earlier to 4.8% now. She highlighted financial stress among shadow banks and poor growth in rural incomes as pain points. On the country’s budget, she said that fiscal targets need to be met, “at least from a medium term perspective" and that state spending was best directed at public investment. She also pointed to India’s credit slump. Lending had to be revived without leaving a trail of bad loans in its wake.
Frankly, none of that is either controversial or suggestive of anything beyond a realistic reading of what ails India’s economy. In fact, going by other recent statements, one could accuse the IMF of being behind the curve on tracing our slowdown and its causes. Let’s not read politics into Gopinath’s words. She is an economist. Her job is to say it like it is, in the IMF’s view, whether it pleases us or not.