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The International Monetary Fund (IMF) has called for determined efforts from Indian policymakers to reinvigorate structural reforms to raise public and private investment and boost inclusive growth.
In their annual assessment of the Indian economy – known as Article IV consultations – the IMF Executive Board noted that economic growth had slowed to below last year's trend due to cyclical and structural factors.
Structural reforms and fiscal consolidation were required to bring growth back to potential and ensure its inclusiveness, the IMF Executive Board said.
Simplifying procedures, making contracts more enforceable and facilitating land acquisition are some of the structural reforms that need to be pursued, say IMF economists.
Financial sector development and reforms are needed to improve access to credit and diversify funding sources, the IMF said.
Addressing skill mismatches, increasing labour market flexibility, and improving agricultural productivity are crucial to support formal job creation and reduce poverty, the Executive Board said.
The IMF expects Indian economy to grow 7 per cent in 2012-13. This is lower than the 7.6 per cent growth projected by the Government for the current fiscal.
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