A mix of fiscal improvement and financial sector reforms, boosting venture and consumption, is relied upon to “bolster a recuperation” in India’s financial development to 6.6 percent in 2020-21, a United Nations (UN) report said.
As indicated by the World Economic Situation and Prospects (WESP) report, the Indian economy is likewise expected to develop at 5.7 percent in the current 2019-20 financial. This is higher than the Narendra Modi government’s estimates of a 11-year-low growth of 5 percent in 2019-20 as per the current situation of indian economy.
“Heavy reliance on monetary policy has its limits. We should look at a balanced mix of both monetary and fiscal policy,” Kumar said.
Asking which sector will propel the growth of India, Kumar said,“Infrastructure and education are the sectors that can never be over-emphasized. Further, there is also a need to invest in young people.” Also adding to it he said that credit crunch in the market is affecting the demand currently,“Demand crunch is also very serious. It is a chicken and egg situation.”
Citing a combination of “external headwinds”, falling trade and domestic challenges as reasons for last year’s slowdown, the report said economic activity is expected to recover in most countries after effects of “one-off shocks wane” and governments introduce fiscal expansion for the current situation of indian economy.
Nagesh Kumar likewise shed light on the financial possibilities of India’s neighbors. Pakistan’s economy — right now battling with “twin shortfalls” with an anticipated development of 3.3 percent in 2019-20 — is additionally expected to recoup from 2021-22 onwards in the midst of government changes. Considering Bangladesh the quickest developing economy in South Asia, Kumar said its development has improved to 8.1 percent in the current financial. “Truth be told, it has profited the most from the US-China exchange war,” included Kumar.
But there are some risks are also involved with it. While overall growth is expected to rebound, the South Asian region will keep facing “daunting” challenges to sustainable development, the WESP 2020 said.It further warned that a “flareup of trade tensions”, “financial turmoil” or an “escalation of geopolitical tensions” could potentially challenge the economic recovery in the region.South Asia has been exposed to “external shocks” such as trade and climate change. This is due to insufficient climate-resilient infrastructure and the lack of “economic diversification”, it said.
So, through these facts and statements we can understand the current situation of indian economy as well as for the overall southern part of Asia and the risk associated with the coming fiscal year. In case you have some doubts or suggestion feel free to contact us.
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