Former CEA Kaushik Basu Decodes State Of Indian And Global Economy

Watch this exclusive interview with noted economist Kaushik Basu, Professor of Economics at Cornell University, former Chief Economist of the World Bank, and also the Chief Economic Adviser in the Ministry of Finance from 2009 to 2012, with BTTV Managing Editor Siddharth Zarabi. The interview comes at a time when India, the world's fifth-largest economy in the world, is projected to overtake Japan to become the world’s third-largest economy with a GDP of $7.3 trillion by 2030, as per S&P Global Market Intelligence. After two years of rapid economic growth in 2021 and 2022, the Indian economy has continued to show sustained strong growth during the 2023 calendar year. Meanwhile, the Reserve Bank of India is trying to support growth in the face of shrinking fiscal space and an external situation that is worsening by the day. There is also no respite from the domestic market since with the general election approaching pre-poll announcements of freebies are gaining momentum across states. India has set a glide path to reduce the fiscal deficit to 4.5 percent of GDP by 2025-26. In the post-pandemic period, the deficit expanded to 9.1 percent in the first Covid-19 year. Due to worries about financial stability or the potential. for imported inflation, policymakers in emerging markets have made a conscious effort to limit the extent of currency depreciation. The interest rate differential between the US and emerging markets has narrowed to record levels since the decade of 2000. The US yields rose to 16-year highs breaching 5 percent, with central bankers talking about a 'high for long' interest rate environment.