Indian economy much more resilient to external shocks: IMF

The Indian economy is much more resilient to external shocks now than was last

RELATED ARTICLES

year, a top IMF official has said, attributing this to a series of administrative decisions and policy measures taken by the Union Government.

"We see India much more resilient than they were about the middle of last year to external shocks,” Paul Cashin, the International Monetary Fund (IMF) Assistant Director of the Asia and Pacific Department told reporters during a conference call.

"In recent months, India has taken very substantial measures to narrow both its external and fiscal imbalances, tighten monetary policy, move forward on structural reforms, and address aspects of this market volatility," Cashin said in response to a question during the call.

"The authorities have met their fiscal target for this fiscal year.

"Investment project approvals are accelerating, and they're beginning to tackle the inflation issue by tightening the monetary stance," Cashin said.

He said all these developments "certainly make India more resilient to any external shocks that may be coming along".

Briefing reporters on the results of the annual IMF consultations with India, Cashin said growth has slowed significantly in India, chiefly because of the structural bottlenecks and weaknesses in investment.

It will take a period of time to recover back to the higher levels that India enjoyed in previous years, he said.

Joining the conference call from New Delhi, Thomas Richardson, IMF's Senior Resident Representative, said India’s financial system is fundamentally sound.

Responding to questions, Cashin argued there is no reason why India should not go back to 8-9 percent growth rate.

"Traditionally India has grown at 7, 8, 9 percent, and we see no reasons why it can't go back to those sorts of levels if some of the bottlenecks and structural reforms are introduced, which is presently holding back India's growth path," he said.

Setting the agenda for the next government to be formed after the general elections, Richardson on Thursday also emphasised on the need to focus on power generation, mining reforms in terms of pricing of natural resources as well; and better revenue.

"We think there are some structural things that they can do that would be growth positive, growth enhancing while also improving India's sustainability, reduced vulnerability, and so forth," Richardson said and called for reducing unproductive subsidies.

"One way that India can better target subsidies, not only fuel subsidies, but also food subsidies, is by moving forward with direct cash transfers linked to the unique identification system, that so called Aadhaar, that the government is pushing forward," he said.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.
Image CAPTCHA
Copy the characters (respecting upper/lower case) from the image.

EDITORIAL OF THE DAY

  • State-owned banks can ride technology surge to penetrate retail segment

    For the first time in recent history, two large private sectors banks, ICICI and Axis have reduced their headcounts.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Amita Sharma

The rabbit hole of outcome budgets

Would you tell me, please, which way I ought to ...

Zehra Naqvi

Dignity of labour is dignity of life

M Rafi Khan, a retired police IG, used to ...

Gautam Gupta

Retailers have it tough, thanks to e-commerce

For the past few months our focus has been on ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture