Praises India’s near term fiscal policy and RBI’s proactive monetary policy actions.
*Projects India’s economy to grow 6.3% in current fiscal year*
December 19, 2023
The International Monetary Fund, IMF has commended India’s economic
resilience and growth amid global challenges. The Fund in its annual Article IV
consultation report has said that India has emerged as a star performer and is
projected to contribute more than 16 per cent of the global growth. It said,
aided by prudent macroeconomic policies, India is on track to be one of the
fastest-growing major economies in the world this year.
The report observed that there is a very strong push by the government to
invest in infrastructure and develop the logistics that are needed for a solid
basis for growth. “The government has done several structural reforms, the
flagship one being the digitalisation, which has been building up over many
years and has put India on a strong platform for increased productivity and
growth in the future” it added. It projected Indian economy to grow at 6.3%
during the current fiscal.
“India has potential for even higher growth, with greater contributions from
labour and human capital, if comprehensive reforms are implemented,” the
IMF said. It recommended that policy priorities should focus on replenishing
fiscal buffers, securing price stability, maintaining financial stability, and
accelerating inclusive growth through comprehensive structural reforms.
IMF also praised RBI's proactive monetary policy actions and strong
commitment to price stability. It agreed that the current neutral monetary
policy stance, anchored on a data dependent approach, is appropriate and
should gradually bring inflation back to target. RBI's Monetary Policy
Committee has raised the policy repo rate by 250 basis points in 2022-23 to 6.5
percent to bring down high inflation following a surge in global commodity prices.
