In Washington, a top economist working with the International Monetary Fund (IMF) said that the world is very optimistic about India. He highlighted how India’s digital systems and efforts to help everyone grow are being praised by many countries. He noted that India’s economy has been doing well after COVID-19, with a growth rate of about seven percent. Even though there was a small slowdown recently due to less spending on big projects and some drops in exports, he believes this is just a temporary phase.
Subramanian, who used to be India’s Chief Economic Advisor, explained that during the COVID pandemic, India took a unique approach. While many countries only focused on people buying less, India recognized that the pandemic hurt both supply (availability of goods) and demand (people wanting to buy goods). This led to a balanced mixture of strategies that helped those who were most affected.
Because of these smart decisions, when the war in Europe created problems for many other economies, India managed to keep its inflation lower than in many places around the world. In fact, while many countries faced huge price increases, India did not. He pointed out that between 2002 and 2013 productivity grew slowly, but since 2014, it has increased much faster.
He also mentioned that a key sign of a healthy economy is how many new businesses start up. From 2004 to 2014, only 3.2% of new companies were created, but since then, the number has grown much more, making India’s entrepreneurial scene the third largest in the world. In ranking for innovation, India jumped from 85th place in 2015 to 39th this year, showing great improvement.
For India to reach its goal of becoming a $55 trillion economy, Subramanian stressed the need to boost manufacturing jobs. He also said that society should change its views about wealth and the people who create it. In the U.S., being wealthy is often seen as a good thing, while in India, there’s sometimes a negative view of wealth creators.
He emphasized that wealth is essential for job creation because wealth creators invest in businesses that eventually provide jobs. To make progress, India must recognize the importance of wealth creation for its overall growth and well-being.
