IMF Raises India Growth Forecast to 7
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3/12/2015 IMFraisesIndiagrowthforecastto7.2%thisfiscalTheHindu
http://www.thehindu.com/todayspaper/tpbusiness/imfraisesindiagrowthforecastto72thisfiscal/article6983852.ece 1/2
Today'sPaperBUSINESS
IMFraisesIndiagrowthforecastto7.2%thisfiscal
PujaMehra
TheInternationalMonetaryFund(IMF)hasforecastIndiawillgrow7.5percentin201516,upfrom7.2percentinthecurrentyear,aprojectionlessoptimisticthanthatoftheModigovernment.
IntheUnionbudget2015,thegovernmentestimatedgrowthofupto8.5percentin201516.
TheIndianeconomyisthebrightspotinthegloballandscape,becomingoneofthefastestgrowingbigemergingmarketeconomiesintheworld,theIMFsaidinanofficialstatement.Thereportstressedtheurgencyofcertainkeyreforms,includingthebottlenecksintheenergy,miningandpowersectorsinfrastructuregaps,landacquisitionprocessesandenvironmentalclearances.
InitsannualassessmentoftheIndianeconomyinthemandatoryArticleIVannualreport,theIMFsaidthatIndiasvulnerabilitieshaverecededmorethanthoseofmostemergingmarketsandsentimenthasbeenrevived.
TheIndianeconomyisreviving,helpedbypositivepolicyactionsthathaveimprovedconfidenceandlowerglobaloilpricesTocontinueonthistrend,Indianeedstorevitalisetheinvestmentcycleandacceleratestructuralreforms,accordingtothestatement.
Newinvestmentprojectannouncementshavestartedtopickup,particularlyinthepowerandtransportsectors,saidIMFMissionChiefforIndiaPaulCashin.Healsonotedthatbolsteringfinancialsectorhealthandfurtherfinancialinclusionwouldsupportgrowthgoingforward.
Mr.CashinsaidthatwhileIndiaiswellplacedtocopewithexternalshocks,therearepossiblerisksonthehorizon,bothexternalanddomestic.Theseincludespilloversfromweakglobalgrowthandpotentialglobalfinancialmarketvolatilitythatcouldbedisruptive,includingfromanyunexpecteddevelopmentsastheUnitedStatesbeginstoraiseitsinterestrates.Onthedomesticfront,theweaknessesincorporatebalancesheets,especiallyinlightoftheincreaseincorporateleverageofthepastfewyears,andworseningbankassetqualitybearwatching,astheycouldweighongrowth.
TheIMFreportalsosaidthatIndiaseconomicprofilerecentlygotaliftasthecountryimprovedthewayitmeasureseconomicoutput.Therevisednationalaccountsseriesincorporatesnumerousconceptualandmethodologicalimprovementsthatmakethemmoreconsistentwithinternationalbestpractices,itsaidaddingthatthereportitselfwaspreparedbeforetherevisionswerereleasedbytheCentralStatisticsOffice.
Mr.CashinalsogavethumbsuptotheModigovernmentsrecentmovetointroduceaflexibleinflationtargetingframework.Itwillhelpdeliverlowandstableinflation,anddiminishtheprospectofrenewedboutsofhighinflation,
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http://www.thehindu.com/
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3/12/2015 IMFraisesIndiagrowthforecastto7.2%thisfiscalTheHindu
http://www.thehindu.com/todayspaper/tpbusiness/imfraisesindiagrowthforecastto72thisfiscal/article6983852.ece 2/2
hesaid.
Amongthereformsthereportrecommendedarestepsintheagriculturesectorforefficientprocurement,distribution,andstorageoffoodinthepublicsystem.Greaterflexibilityinlabourmarketsandimprovementsineducationformeetingtherisingshortagesofskilledlabourwereamongthekeyreformssuggested.
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