India maintained its 'world’s fastest-growing economy' tag with a projected 6.1 percent growth rate for 2019, even as the International Monetary Fund (IMF) cut its growth projection by a percent.
The IMF released its report titled: World Economic Outlook, October 2019: Global Manufacturing Downturn, Rising Trade Barriers on October 15, which pegs India’s 2020 GDP growth at seven percent.
Globally, India stood in contrast to IMF’s gloomy economic projection of a 'synchronised slowdown'. This despite it trimming India’s prospects to 7.3 percent in April and seven percent in July.
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Cumulative global growth has been projected at three percent this year and 3.4 percent next year.
IMF’s projected growth rate for India coincides with the Monetary Policy Committee’s 6.1 percent estimate as well.
As per the report, the country's growth going forward will be supported by the lagged effects of monetary policy easing, reduction in corporate income tax rates, recent measures to address corporate and environmental regulatory uncertainty, and government programmes to support rural consumption.
In the medium term, IMF expects India's growth to stabilise around 7.3 percent and bases this assumption on continued implementation of structural reforms.
IMF suggested that India use monetary policy and broad-based structural reforms to address cyclical weakness and strengthen confidence. Other measures include reducing the public sector's role in the financial system, reforming hiring and dismissal regulations, and land reforms to expedite infrastructure development.