The country is maintaining “momentum” as the world’s fastest-growing major economy, Finance Minister Nirmala Sitharaman said
India has lifted 135 million people out of poverty in the past five years and remains the world’s “fastest-growing” major economy, Finance Minister Nirmala Sitharaman told the country’s parliament on Thursday.
Sitharaman, who featured on Forbes’ ‘World’s Most Powerful Women’ list this week, was citing numbers contained in a report on poverty by the government advisory body NITI Aayog. The report, published in July, assessed “acute deprivations in health, education, and standard of living” using UN-approved parameters.
In 2022, around 15% of the Indian population was living in poverty, compared to 24.8% in 2015-16.
Speaking about the country’s economic indicators, Sitharaman noted that economic growth was “very high, it is the highest in the world” during the second quarter of the fiscal year. “We continuously maintain that momentum of being the fastest-growing economy”, she added.
Her remarks came a day before India’s central bank increased its GDP growth forecast for the 2023-24 financial year on Friday from 6.5% to 7%, following better-than-expected growth in the quarter that ended in September. The Reserve Bank of India also kept the repo rate unchanged at 6.5%.
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On Monday, credit rating agency S&P Global Ratings predicted that India would become the world’s third-largest economy by 2030, and is also set to be the fastest-growing economy over the next three years. Earlier in October, the World Bank attributed the Indian economy’s “resilience” to “robust domestic demand, strong public infrastructure investment, and a strengthening financial sector.”
According to New York-headquartered S&P, India’s gross domestic product (GDP) will grow 6.4% in the financial year 2024 compared to a previous forecast of 6%, “as robust domestic momentum seems to have offset headwinds from high food inflation and weak exports.”
S&P predicted that Indian GDP would hit 7% in the financial year 2026-27 if current trends hold. A “major test” for India, the agency observed, would be becoming the next big global manufacturing hub, a sector dominated by neighboring China in the region.
Speaking in parliament, Sitharaman suggested that New Delhi had managed to increase its exports to the US, challenging Beijing. Citing a report by the Boston Consulting Group (BCG), she said ‘Made in India’ products are becoming increasingly visible in US stores. “While US goods imports from China have declined by 10%, those imported from India have risen by 40% from 2018 to 2022.”
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As per data reported in the Periodic Labor Force Survey Annual Report 2022-2023, released by the National Sample Survey Office, India has also seen a downward trend in unemployment in recent years. The unemployment rate for individuals aged 15 and over, reached a six-year low of 3.2% during the period from July 2022 to June 2023, noted the study.
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