The International Monetary Fund on Thursday said India has worked on the fundamental aspects of its economy but there were problems, such as long-term drivers of growth, that need to be focused on, PTI reported. This came three days after the global body lowered India’s growth rate projection to 6.1% for the 2019-’20 financial year.
“In the [Indian] financial sector, especially non-banking institutions, there are steps taken now to consolidate banks,” IMF Managing Director Kristalina Georgieva said. “They ought to help resolve some of these issues. In India, what is critically important is to continue with addressing the long-term drivers of growth. Investment in human capital in India is a top priority.”
In August, Union Finance Minister Nirmala Sitharaman announced that 10 public sector banks would be merged into four entities. The mergers will reduce the number of state-owned banks from 27 in 2017 to 12. A week before that, she unveiled a slew of measures to revive economic growth, which fell to a six-year-low in the April-June quarter. She announced major Budget rollbacks and withdrew enhanced surcharge on capital gains.
Georgieva said the country would have to continue including more women in the labour force. She said India has “very talented women, but they stay at home”.
The IMF chief said there had been “a very strong growth” in India over the last few years and the international body had predicted reasonably strong growth for India. However, much like the rest of the world, India was also witnessing a slowdown. “So slightly over six per cent is what we expect to see in 2019,” Georgieva said.
She claimed that structural reforms were a priority for India and the IMF would expect to see continued reforms.
Revising the growth projection for India in the 2019-’20 financial year, the world body had said growth would be supported by “the lagged effects of monetary policy easing, a reduction in corporate income tax rates, recent measures to address corporate and environmental regulatory.”
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