Managing Director of International Monetary Fund (IMF) Christine Lagarde has praised India for maintaining its “fastest-growing economy” status, saying that the South Asian country’s star shines bright in global gloom.
Speaking at three-day “Advancing Asia” Summit in New Delhi on Saturday, the IMF chief said that India has made huge economic progress mainly because of its young workforce and policy reforms. “It’s fitting we meet in India. It’s the world’s fastest growing large economy, on the verge of having its largest, youngest ever workforce – and, in a decade’s time, set to become the world’s most populous country,” she told the audience.
In the presence of Prime Minister Narendra Modi, Lagarde said that India, as a rare bright spot in the current global economic turmoil, could help Asia ensure economic progress. The IMF chief thanked the Modi administration for adopting various reform programmes in order to boost the Indian economy. At the same time, she expressed serious concerns about Asia’s economic progress, saying it is unfortunate that the continent remains home to two-thirds of the world’s poor.
Lagarde further listed six priorities that could help 4.4 billion Asian people realise their full potential. According to the IMF supremo, the Asian countries should try to broaden access to services, like health and finance, through necessary steps. She also advised Asian countries to leverage fiscal policy impact with instruments, like conditional cash transfer programmes. Apart from empowering women with access to education and dismantling barriers, these countries should provide amenities, like water, sanitation and electricity, to their people, she added. Lagarde also highlighted the importance of greater global trade integration for more sustained growth, saying that tackling the challenge of climate change would be crucial.
For his part, Prime Minister Modi said India has proved that democracy and rapid economic growth can co-exist. The premier stressed that it was a challenge for India, as a large and diverse country, to promote economic growth and maintain social stability by adopting correct policies.
Meanwhile, Modi expressed hope that the IMF’s longstanding quota reforms would give more say to countries, like India, in the decision-making process. On the first day of the three-day Summit, the PM said: “Reform of global institutions has to be an on-going process. It must reflect changes in the global economy and the rising share of emerging economies. I am, therefore, very happy that the IMF has decided to finalise the next round of quota changes by October 2017.”
Currently, India has voting rights of 2.34% at the 188-member IMF. India also has a share of 2.44% in terms of quota. The quota reforms will give more representation to other emerging market economies, such as Brazil, China and Russia, which would be among the 10 largest members of IMF (for the first time).
Indian Finance Minister Arun Jaitley, Governor of Reserve Bank of India (RBI – India’s Central Bank) Raghuram Rajan and Melinda Gates of Gates Foundation also attended the Summit, being organised jointly by the Indian government and the IMF.