The Hindu Business Line : IMF pegs Indian economic growth rate at 6.7 pc

THE International Monetary Fund (IMF) has pegged the Indian economy's growth rate at 6.7 per cent for fiscal 2005-'06 and predicted a growth rate of 7.5-8 per cent in the medium term.

"Our view is that the Indian economy would grow by 6.7 per cent during fiscal 2005 and 7.5-8 per cent in the medium term," the IMF Managing Director, Mr Rodrigo de Rato, told newspersons here.

On the issue of bringing in controls on foreign portfolio flows into India, Mr Rato made it clear that he was not in favour of imposing any tax for this purpose. "I don't see any proposition from the government authorities on imposing tax on foreign portfolio inflows. As a theoretical proposition, governments can always have controls to avoid excessive speculation. We don't advise imposition of taxes for this purpose. They can always have other forms of controls," he said.

He also appreciated the Government's proposal to bring down corporate tax rate and reduce import tariff rates. "There is keen awareness of the need to continue to strengthen India's fiscal position, open the economy more fully to the world and remove the remaining domestic constraints on growth," he said.

Mr Rato also said the country needed to accelerate and broaden reforms, especially trade reforms.

On the Reserve Bank of India's monetary policies, the official said the central bank has "skilfully conducted its monetary policies and has managed to contain inflation at acceptable levels, despite the rapid rise in world oil prices last year."

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