Reserve Bank of India (RBI) Deputy Governor Michael Debabrata Patra has said that India is better positioned currently, as its macroeconomic fundamentals have improved significantly, and external sector indicators point to the availability of enough cushions to manage external shocks. He also said India will have to use its macroeconomic strength to neutralise external sector threats.
The deputy governor said ‘I present this strength (macroeconomic fundamentals) as a challenge because the international environment is turning hostile, with geopolitical tensions, the long-lasting scars of COVID and the inevitability of climate change.’ Furthermore, he said countries all over the world are contemplating shifting their policy stances away from a pandemic mode to a more normal one. This will involve global spillovers to which India cannot be immune. Hence external sector viability is critical.’
He further said India is currently one of the fastest-growing major economies in the world. In purchasing power parity (PPP) terms, India is the third-largest economy in the world. He said ‘Projections show that by 2040 India will be the second-largest economy in the world. This, in my view, is the final challenge - preparing, with the BRICS, to be a global economic powerhouse.’