Indian Economy: Monetary Policy Committee member Ashima Goyal has said that India still has a long way to go to achieve its full potential. “The United Progressive Alliance (UPA) government inherited a strong economy and also benefited from the high growth of that period,” Goyal told the media. The Indian economy is performing well amid the adverse global environment. Ashima Goyal, member of the Monetary Policy Committee of the Reserve Bank of India (RBI), has said this. He said the Narendra Modi-led government has implemented several reforms in the last nine years, which have improved critical macroeconomic indicators.
However, he also said that India still has a long way to go to achieve its full potential. "The United Progressive Alliance (UPA) government inherited a strong economy and also benefited from the high growth of that period," Goyal told the media.
He said that after 2008, the economy weakened due to the impact of the global economic crisis and corruption scandals. She was asked how she would compare the performance of the 10-year tenure of the UPA government (2004-14) and the nine-year term of the Modi-led National Democratic Alliance (NDA) government.
He said the Modi government had inherited a twin deficit (high fiscal deficit and high current account deficit), high inflation and weak banks. Still, it has corrected all these and implemented other reforms as well. That is why the Indian economy is performing well in an adverse global environment.
On claims by some American economists that India is exaggerating economic growth, Goyal said the quarterly data cannot be exaggerated. These figures are subject to seasonality and base effects as well as 'measurement' issues.
He clarified that the growth rate in the first quarter of the current financial year has been high due to the base effect. There was a considerable decline of 23.2 per cent in the economy in the first quarter of 2020-21. He said that the growth rate in the first quarter of 2021-22 was 21.6 per cent. It has been 13.1 per cent in the first quarter of 2022-23 and 7.8 per cent in the first quarter of 2023-24. India's gross domestic product (GDP) growth rate for the April-June period of 2023-24 has been 7.8 per cent, which is the highest level in the last four quarters.
Goyal said that the growth rate in the last three financial years has been negative at 6.6 per cent, 9.1 per cent and 7.2 per cent, respectively. This shows that the impact of the base effect is gradually decreasing. He said, "All kinds of data show that growth is strong." He said that in the midst of a global slowdown, an annual growth of six per cent would be considered very good.
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