International Monetary Fund (IMF) has said that India’s growth is projected to notch up to 7.5 per cent in 2016-17, overtaking China’s GDP by more than 1 per cent. Retaining its last October forecast, the IMF in its latest, World Economic Outlook report said, a recovery of private investment is expected to further strengthen growth. It said, growth will continue to be driven by private consumption, which has benefited from lower energy prices and higher real incomes.
The report said monetary conditions remain consistent with achieving the inflation target of 5 per cent in the first half of 2017, although an expected public sector wage increase pose upside risks. It also makes a pitch for fiscal consolidation to continue, underpinned by revenue reforms and further reductions in subsidies. The report said, sustaining strong growth over the medium term will require labour market reforms and dismantling of infrastructure bottlenecks, especially in the power sector.
