THE overall headline numbers of India’s economy are strong, reflecting alargeamount of public investment which hasbeen a critical factor driving growth, according to IMF DeputyManaging Director GitaGopinath. She said Indiamust carry out furtherreformsto maintain its growth trajectory and ensure sufficient jobcreation. Gita Gopinath, who expects the Indian economy tobecomethe third largest in the worldby 2027, said, “What is important is to ensure that all of that growthis accompaniedbysufficientjobcreationin the economyso that there is wide spread sharing.” Addressing an event at heralma mater, the Delhi School of Economics, she said, “Froma long-term perspective,thereis no trade-off between fiscal consolidation and growth.

 

If a country does not have sufficient checks and balances on its fiscal situation, it is likely to endup in a crisis. Therefore, thereis a reason why governmentsshould engage in fiscal consolidation. Now, there is, of course, a question in the nearterm by design, reducing yourfiscal deficit in the short-termcould have a negative effect. However, there are ways to doit that do not haveasignificantnegative impact.”