India committed to reform, join us in this journey: FM

The government’s reform agenda aims to overcome the challenges posed by the covid-19 pandemic and build a stronger economy, the minister said at a round table discussion in Washington DC on ‘Investing in the India decade’.

“The government is committed to pursuing the reform agenda for building a stronger and more dynamic India to provide plenty of opportunities for collaboration and investments, and welcomed the participants to join this incredible journey,” the finance ministry said in a social media post.

Despite the reality of reset across the globe and the challenges posed by the covid-19 pandemic, India’s reform momentum remains unabated, the ministry said, quoting Sitharaman.

The finance minister is currently in the US to attend the spring meetings of the World Bank and the International Monetary Fund, in addition to G20 meetings.

The round table was organized by the Federation of Indian Chambers of Commerce & Industry (FICCI) and the US-India Strategic Partnership Forum on the sidelines of the spring meetings.

In separate meetings with IMF officials and finance ministers from other countries, Sitharaman also highlighted the spillover effects of combating global inflation on developing countries and pointed to the need for world leaders to urgently address debt distress in poor nations.

Separately, Sitharaman met Mohammed Aljadaan, Saudi Arabia’s finance minister and held discussions on an expert group set up by the G20 to strengthen multilateral development banks.

The two leaders also discussed global inflation issues, including the spillover effects of the inflation-fighting measures on the growth prospects of developing and low-income countries, and the urgent need to tackle increasing global debt distress and improving the implementation of the G20 common framework on debt treatment, the ministry said.

According to International Monetary Fund estimates, about 60% of low-income countries were either at a high risk of falling into or already in debt distress in 2021. In 2015, that number was below 30%.

Sitharaman, who also met IMF first deputy managing director Gita Gopinath on Wednesday, noted the multilateral agency’s concerns on key downside risks to the economy, including financial sector stress, rising real interest rates, elevated debt, inflation, geo-political fragmentation, and faltering growth in China.

Sitharaman underlined the progress made in India’s digital public infrastructure (DPI) platform, with most Indian languages now having access to the platform.

In its latest World Economic Outlook, released on Tuesday, the International Monetary Fund lowered its baseline forecast for 2023, which assumes that the recent financial sector stresses are contained, from 2.9% made in January to 2.8%.

“Risks to the outlook are heavily skewed to the downside, with the chances of a hard landing having risen sharply,” the International Monetary Fund said.

The multilateral agency’s latest forecast for India’s growth in FY24 is 5.9%, down from the January forecast of 6.1%.