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India to grow at around 7% this year despite headwinds: Sitharaman

Finance Minister Nirmala Sitharaman in the US

Finance Minister Nirmala Sitharaman has said that India is likely to register a growth rate of about 7 per cent this financial year. The International Monetary Fund (IMF) has reduced India’s growth rate at 6.8 per cent from the earlier 7.4 per cent.

“I am aware that growth forecasts around the world are being revised lower. We expect India’s growth rate to be around 7 per cent this financial year. More importantly, I am confident of India’s relative and absolute growth performance in the rest of the decade,” she said, adding that just after pandemic, the conflict in Europe has had an impact on energy, fertiliser and food prices.

“Now, synchronised global monetary policy is tightening in its wake. So, naturally, growth projections have been revised lower for many countries, including India. This triple shock has made growth and inflation a double-edged sword,” Sitharaman said.

The minister, who is currently in the US to attend the annual meetings of the International Monetary Fund (IMF) and the World Bank, said that India has already started taking measures to make Rupay more acceptable in other nations.

Sitharaman, speaking at a session— “India’s economic prospects and role in the world economy” organised by the Brookings Institution said that the next Union Budget would have to address issues to maintain the momentum of the country’s growth while addressing inflation.

She said that while India is better positioned today, the challenges related to energy and fertiliser are “extraneous”.  She also said that the reform process is a continuous exercise. “We are committed and going through it,” she said.

On unemployment, she said that overall growth in economic activity during the first quarter of this financial year is reflected in the National Provident Fund Records. She pointed out that the net payroll additions doubled in the first quarter compared to the corresponding period last year.

The minister said “reshaping” and “recasting” of employment are taking place in the Indian economy. “The nature of employment is also getting speedily ramped up,” she said.

Cautioning the West against slapping sanctions on countries, Sitharaman said that the advanced economies must bear the responsibility for the “global spillover” of their political and economic policy decisions.

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