‘Global institutions’ India growth forecast of 7-8% is a rebuttal to Rajan’

Gajendra Singh Shekhawat. File

Gajendra Singh Shekhawat. File
| Photo Credit: Sushil Kumar Verma

The consensus view of global institutions that India’s growth rate will be above 7% next year is a rebuttal to the former Reserve Bank of India (RBI) governor Raghuram Rajan’s more pessimistic view of the Indian economy, Jal Shakti Minister Gajendra Singh Shekhawat said on Friday, adding that Dr. Rajan “will soon come to change his views.”

Addressing a press conference, Mr. Shekhawat said that all major institutions, including the World Bank, have predicted that the country’s growth rate next year would be between 7% and 8%.

Also read: Ex-RBI Governor Raghuram Rajan joins Rahul Gandhi’s Bharat Jodo Yatra in Rajasthan

Dr. Rajan, who had joined Congress leader Rahul Gandhi’s Bharat Jodo Yatra on Wednesday, said that India would face a difficult year ahead as an economic downturn was looming across the world. He had observed that Indian interest rates have also gone up, but exports have been slowing, adding that India’s inflation problem was also going to be negative for growth. The country would be lucky if it grows at 5% next year, the former RBI governor had said.

Mr. Shekhawat said that only Dr. Rajan could explain the reason behind his pessimistic view of the Indian economy for 2023. “All major institutions from RBI to World Bank are saying that India’s growth rate next year will be between 7 to 8%. After that if an individual says something, then only he can explain the basis of his assessment. This can be his own views,” the Minister said.

‘Will change his views’

“I want to recall one thing. When Prime Minister Narendra Modiji had announced the MUDRA scheme for self-employment and gave a helping hand to small entrepreneurs, Raghuram Rajan had predicted that maximum NPAs would be in MUDRA scheme and it would collapse. I think today he should reconsider his views on the scheme and similarly he will also change his views about the Indian economy in the next three to four years,” he added.

Citing the latest export data, Mr. Shekhawat said that India’s trade had exhibited an impressive performance, with overall exports – merchandise and services combined – worth $58.22 billion in November 2022. Exports exhibited a positive growth of 10.97% over the same period last year, he said.

“In last eight years of ‘Make in India’, annual FDI [Foreign Direct Investment] doubled to $83 billion,” he added.

On the question of the trade deficit with China, Mr. Shekhawat said, “The country is importing raw materials and components from China, and by doing value addition, exporting goods to other countries. So the deficit with China should not be seen in isolation. It should be seen with the overall import-export bouquet. We are exporting more today,” he said.

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