India is set to be the fastest-growing major economy and an engine of growth globally despite facing global obstacles, Aditya Birla Group Chairman Kumar Mangalam Birla has said. A sharp recovery to pre-pandemic levels has been witnessed by India due to the swift and widespread rollout of the vaccination programme, said Birla in the latest annual report of UltraTech Cement Ltd.
“A strong digital ecosystem, fiscal and monetary policy and various government schemes helped small and medium enterprises and the worst affected sections of the population to survive while reviving demand and bringing the economy back on track,” said the industrialist while addressing shareholders of UltraTech. Birla said the global economy had recovered from the pandemic shock in 2022 on the back of supportive fiscal and monetary policies and mass vaccination programme.
At the end of FY22, however, Russia’s invasion of Ukraine and the subsequent sanctions imposed on the Putin-led country came in as a huge shock. “It disrupted energy markets and supply chains and added to the already evolving inflationary pressures and concerns over consumer demand,” he said.
The Indian economy has not remained unscathed by these global developments, he added. Partly on account of the elevated commodity prices in global markets, India’s inflation pushed higher than the target of the Reserve Bank of India (RBI). To control inflationary risks, and reduce the pressure on the rupee, RBI has been selling reserves and unwinding the extraordinary liquidity support provided by it during the pandemic.
“On the positive side, economic activity in India has witnessed a sharp recovery to pre-pandemic levels on the back of a rapid and widespread rollout of the vaccination programme,” Birla said.
Even as the global headwinds are being felt, India’s growth recovery is progressing well, and most estimates peg economic growth at around 7 per cent in FY23, noted the Aditya Birla Group chairman. “India, therefore, is poised to be the fastest-growing major economy in the world and an engine of global growth,” he added.
India’s exports are exhibiting a strong buoyancy, and economic sentiment has been supported by a robust pipeline of infrastructure projects as well as the government’s pragmatic policies, such as the production-linked incentives schemes, he said. “Many industries have witnessed fresh project investment announcements. Foreign direct investment flows have remained strong. The burden of non-performing assets in the banking sector seems to have peaked out and is easing,” Birla added.
Besides, dynamism in India’s digital ecosystem, diversification of global supply chains away from China and the greater emphasis of investors on sustainable finance offer new opportunities for India. These “trends lend confidence to a robust economic narrative” for India in the medium term, which augurs well for the corporate sector as well, Birla added.
On the world economy, Birla said growth forecasts have been slashed. “The International Monetary Fund (IMF) now expects the world economy to grow by 3.6 per cent in CY22, which is 0.8 percentage points lower than its pre-war projections,” said Birla.
(With PTI inputs)
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