Gita Gopinath, the inaugural Deputy Managing Director of the International Monetary Fund (IMF), shared insights in an exclusive interview with India Today's News Director Rahul Kanwal. During the conversation, she conveyed that India's contribution to the global GDP stands at approximately 15 percent and highlighted that based on current projections, India is expected to become the world's third-largest economy by 2027-28.
Describing India as an "engine of global growth," Gopinath emphasized that there is still much work to be done to sustain this growth momentum. She stressed the need for structural reforms and acknowledged that while India may become the third-largest economy, it must continue to strive for higher per capita income.
Regarding the expected growth rate for the current fiscal year, Gita Gopinath mentioned it exceeds six percent, attributing this growth to public investment and resilient consumption spending. However, she emphasized the importance of attracting private investment to raise per capita income levels and maintain high growth rates. To facilitate private investment, it is vital to continue investing in public infrastructure.
Gita Gopinath pointed out that only a few Indian states, including Maharashtra, Karnataka, Gujarat, and Delhi, receive a significant share of foreign direct investment, indicating that state governments need to take substantial steps in this regard.
She also highlighted areas that require improvement, such as enhancing the ease of doing business, education, and female labor force participation. One area where India excels in comparison to other countries is digital infrastructure. Gopinath noted India's leadership in this domain, emphasizing its benefits in terms of innovation and fiscal efficiency.
When discussing concerns about China's economy, Gopinath acknowledged its recent slowdown but emphasized that China possesses the resources and policies to address these challenges. She anticipated that China could achieve its 5 percent growth target set by the government in the short term, with a medium-term growth projection of around 3.4 percent.
Regarding India's G20 presidency, Gita Gopinath praised the unanimous adoption of a leader's declaration, highlighting the significance of countries with differing opinions coming together to reach an agreement. She commended India's work on regulating cryptocurrencies, addressing debt issues, and multilateral development bank financing during its presidency.
Gopinath characterized the debt restructuring for Zambia as a "landmark" achievement, emphasizing the importance of private creditors' unanimous agreement. She also discussed the focus on globally enforceable regulations for crypto assets during the G20 Summit, highlighting the collaboration between the Financial Stability Board and the IMF. She mentioned a consensus that crypto assets like Bitcoin should not become legal currency as it would impact monetary sovereignty. The guidelines aim to license and register issuers of such crypto assets, with specific regulations tailored to their use, whether for speculation or payments. Gopinath emphasized the ongoing efforts to shed light on the crypto asset space and establish regulatory transparency.
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