Lok Sabha Question No. 1937 (UNSTARRED), answered on 2022-12-19
Subject: Global Recession
Ministry: FINANCE
Asked by: Lalubhai Babubhai Patel

## MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS ECONOMIC DIVISION

## LOK SABHA UNSTARRED QUESTION No. 1937

## DUE FOR ANSWER ON 19 DECEMBER 2022

## Global Recession

## 1937. SHRI LALLU SINGH:

Will the Minister of FINANCE: be pleased to state:

- (a)  whether  some  countries  are  likely  to  be  hit  by  global  recession  and  if  so,  the details thereof;
- (b)  whether the global recession is likely to impact India also;
- (c)  if so, the details thereof; and
- (d)  the efforts made/being made by the Government to protect the country from the global recession?

## ANSWER

## THE MINISTER OF STATE FOR FINANCE (SHRI PANKAJ CHAUDHARY)

(a)-(c): As  per  the  World  Economic  Outlook  (WEO)  October  2022  report  of  the International  Monetary  Fund  (IMF),  the  global  economy  is  experiencing  several challenges, including the Russia-Ukraine conflict, the slowdown in China, persistently high inflation, and tightening financial conditions, among others. These are weighing heavily  on  global  growth,  especially  in  advanced  economies.  Owing  to  these unfavourable  developments,  the  IMF  has  projected  global  growth  to  slow  from  6 percent  in  2021  to  3.2  percent  in  2022  and  2.7  percent  in  2023.  For  advanced economies, the growth is projected to decline from 5.2 per cent in 2021 to 2.4 per cent  in  2022  and  1.1  per  cent  in  2023.  The  corresponding  growth  for  emerging market and developing economies have been projected at 3.7 percent in 2022 and 2023, down from 6.6 percent in 2021.

The  slowdown  of  global  output  has  also  made  IMF  lower  the  growth  forecast  for India's economy. India's economy is projected to grow 6.8 percent in 2022 and 6.1 percent in 2023. At these growth rates, India's economy continues to be one of the fastest-growing major economies in the world.

(d) :  Government has implemented several measures to limit the impact of external factors  on  India's  inflation  and  growth.  Inflation  has  been  addressed  by  increasing the  domestic  availability  of  food  by  restricting  wheat  flour  exports  and  related products. Export duty has been levied on rice and related products. Import of tur and urad under free category has been extended till March 31, 2023. Customs duty and Agriculture Infrastructure and Development Cess (AIDC) on annual import of 20 lakh metric tonnes each of crude soya bean and sunflower oil for the year 2022-23 and 2023-24 have been exempted. Stock limits imposed on all edible oils and oilseeds vide order dated 3rd February 2022 have been extended up to December 31, 2022. To  further  counter  inflationary  pressures  from  a  rise  in  crude  oil  prices,  the government cut the excise duty on petrol and diesel in May 2022 by Rs.8/litre and Rs.6/litre respectively. The government has also provided a subsidy of Rs 200 per cylinder to Ujjwala Yojana beneficiaries, for 12 cylinders in a year, to further reduce hardship from the price rise.

To give a boost to growth, various efforts have been made by the government that will help the economy grow faster once the current global uncertainties fade. A series of measures were announced in the Union Budget 2021-22, including an increase in Capex  budget  by  34.5  percent  over  2020-21,  expansion  of  the  Production  Linked Incentive  (PLI)  scheme  to  14  sectors,  and  the  introduction  of  Mega  Investment Textile Parks (MITRA), among others. Other major reforms were also introduced to promote domestic manufacturing including National Monetization Pipeline of public sector assets, privatization of public sector banks and insurance companies, reformsbased result-linked power distribution sector scheme, increasing of FDI in insurance sector from 49 per cent to 74 per cent, and rationalization of custom duties.

Further,  in  the  Union  Budget  2022-23,  the  Capex  budget  was  again  increased  by 35.4  per  cent  over  the  previous  year,  PM  Gatishakti  was  launched  for  integrated planning of infrastructure and  synchronized  project implementation across all concerned Central Ministries, Departments and State Governments, and Emergency Credit Line Guarantee Scheme (ECLGS) was extended to provide continued support to MSMEs,  among  others.  As  part of the Atmanirbhar Bharat Mission, the government  has  also  commenced  implementation  of  the  National  Infrastructure Pipeline of projects to drive economic growth in the years ahead. Further, National Logistics Policy has been launched in September 2022 to lower the cost of logistics at par with other developed countries. Financial inclusion and banking services are being  deepened to  reach  the  last  mile  with  the  launch  of  75  Digital  Banking  Units across 75 districts.

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