According to Krishna Srinivasan, the Director of the IMF’s Asia and Pacific (APAC) Department, India’s emergence as the fastest-growing economy is not surprising. He explained that China is more than four times bigger than India, so it is expected that India’s faster growth rate would lead to it surpassing China. Srinivasan praised India’s economic performance, particularly its projected growth rate of 6.8% for the fiscal year 2024-25, calling it “very impressive.”
Srinivasan highlighted India’s ability to navigate multiple shocks, such as the COVID-19 pandemic, the Russia-Ukraine war, and recent tensions in the Gulf region, showcasing the country’s resilience. He attributed India’s impressive growth to strong private consumption and public investment, pointing out that there are no major red flags in the near term. However, he emphasized the need for significant reforms in education and healthcare to fully utilize the potential of India’s expanding labor force.
Srinivasan noted that India has a young, growing population expected to add about 15 million people to the labor force each year. To leverage this demographic advantage, he stressed the importance of substantial investments in education and healthcare so that the growing labor force can effectively contribute to the economy. While expressing optimism about India’s medium-term prospects with a growth rate of around 6.5%, Srinivasan underlined the importance of implementing comprehensive reforms to achieve sustainable growth in the coming years.
Overall, Srinivasan’s insights shed light on India’s economic outlook and the potential for the country to maintain its rapid growth trajectory through strategic reforms and investments in key sectors like education and healthcare.
