Professor Krishnamurthy Subramanian, Executive Director,International Monetary Fund, Washington DC , addressed the All India Services, Central Civil Services, and Military Engineer Services Officers, who are attending their respective Foundation Courses.
The theme of his address was “Disseminating the India Story”.Professor Subramanian stated, with a sense of pride that India is poised to enter a decade of growth at +7%, which was in line with the IMF forecast.
He also stated that India has emerged as a “positive spot” in the world economy, due to the well-designed policy responses that were implemented during the COVID crisis.
Professor Subramanian said that the policy response addressed supply-side disruptions by
allowing the movement of essential commodities even during the lockdown, as any disruptions in
the supply chain would have made it extremely difficult to kick-start the economy, once
again. On the demand side, he said, that targeted schemes were introduced such as the PM
Gareeb Kalyan Yojana which provided free ration to 80 crore poor people, by utilizing the
stocks with FCI. “In order to address the credit needs of the MSME sector and the urban
poor, an Emergency Credit Line Guarantee Scheme, was introduced, in which the Govt
provided guarantees for bank lending”, he stated. He added that the increase in infrastructure spending will “crowd in” the private sector investment and address the supply side through the creation of long term assets and ultimately employment generation, as well.
Continuing his address, Professor Subramanian stated that India followed a unique
economic path of introducing supply-side measures coupled with targeted demand-side
stimulus. “Emerging economies that implemented only demand-side fiscal stimulus are now
facing extremely high rates of inflation, e.g., Turkey (80%), Argentina (70%) and Brazil
(20%)” he said. Similarly, developed countries such as USA, UK, France, Italy and Japan
also followed a similar economic path of demand-side stimulus and are now facing
unprecedented rates of inflation.
