World Bank Country Director in India Auguste Tano Kouame on Tuesday stated that the Indian economy has been remarkably resilient despite a challenging external environment and the country's government through its policy reforms and prudent regulatory measures has played a key role and is putting a lot of effort to make the economy dynamic.
The World Bank's latest India Development Update, titled 'Navigating the Storm' released today states that while the deteriorating external environment will weigh on India's growth prospects, the country's economy is relatively well positioned to weather global spillovers compared to most other emerging markets.
The World Bank has revised its 2022-23 GDP forecast upward to 6.9 per cent from 6.5 per cent, considering a strong outturn in India in the second quarter (July-September) of the 2022-23 financial year.
"India's economy has been remarkably resilient to the deteriorating external environment, and strong macroeconomic fundamentals have placed it in good stead compared to other emerging market economies," said Kouame the World Bank's Country Director in India. However, he said that continued vigilance is required as adverse global developments persist.
According to the World Bank report, policy reforms and prudent regulatory measures have also played a key role in developing resilience in the economy. On fiscal policy of the country, it said increased reliance on market borrowings has improved the transparency and credibility of fiscal policy and the government has diversified the investor base for government securities.
The introduction of a formal inflation-targeting framework during the past decade was an important step in lending credibility to monetary policy decisions, the report said.
"While there are still some challenges in the financial sector, the adoption of several regulatory and policy measures -- including the introduction of a new Insolvency and Bankruptcy Code and the creation of the new National Reconstruction Company Limited -- facilitated an improvement in financial sector metrics over the past five years; these policy interventions are also expected to help alleviate pressures related to non-performing loans," the report also added.
World Bank senior economist and lead author of the report Dhruv Sharma said, "A well-crafted and prudent response to global spillovers is helping India navigate global and domestic challenges."
( With inputs from ANI )
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