Nirmala Sitharaman, the finance minister, stated on Thursday that domestic consumption and investment will be the main drivers of India's growth, but she also issued a warning against potential inflationary pressures due to global and regional uncertainties, which will necessitate constant vigilance on the part of the government and the Reserve Bank of India.
The trade deficit has shrunk as a result of falling imports and declining exports of goods for seven consecutive months, according to a report by ET.
On Friday, trade numbers for September are expected to be made public. Although the World Bank and IMF forecast 6.3 per cent growth, both organizations suggest that India remains a bright spot, the government and RBI predicted the Indian economy to rise by about 6.5 per cent this year.
Sitharaman was addressing the meeting of the World Bank's development committee. She said that the external sector needed to be monitored more closely as goods exports have been affected due to the slowdown in global demand, and there may be a need to strengthen it.
"Services exports continue to do well and are likely to continue doing so as the preference for remote working remains unabated, typically manifested in the proliferation of Global Capability Centres," she said.
The finance minister of India encouraged World Bank's reforms but stressed on the need for more capital investment.
"It is an inescapable truth that we need to look beyond BSO (balance sheet optimisation) measures and consider all options, including an IBRD (International Bank for Reconstruction and Development, which provides loans and guarantees) capital increase to avoid the situation of an unfunded but enhanced mandate for the Bank," she said