Ambitious structural reforms required for Indian economy says IMF
India’s current economic environment is weaker than our earlier estimates and it needs to undertake ambitious structural and financial reforms soon, so that the treasury will grow in the medium term. For this, India has to work under a strategy. The International Monetary Fund said this while giving its feedback on the budget presented recently.
Finance Minister Nirmala Sitharaman presented the budget in the Lok Sabha on February 1. Describing this budget as good, the central government had hoped for major reforms in the near future. At the same time, International Monetary Fund (IMF) spokesman Gerry Rice said that India’s current economic environment is weaker than our forecast.
Rice said, ‘India’s economy is weaker than our forecasts. India needs to make ambitious structural and financial reforms soon, so that the treasury will grow in the medium term. For this, India will have to work under a strategy’.
That is, all the efforts made by the Government of India to remove the sluggishness in the economy so far are insufficient.
The government earns revenue through tax. When the expenditure of the government increases with the revenue, then it has to borrow additional amount from the market. The difference between the government’s total earnings and spending is called fiscal deficit. That is, the amount the government will borrow will be called fiscal deficit.
Apparently, IMF has reduced the estimate of growth in Indian economy in the month of January. The IMF has said that India’s gross domestic product (GDP) growth rate in the fiscal year 2019-20 will be just 4.8 percent. The IMF said that due to sluggishness in India and other emerging countries like it, the growth forecast of the world had to be reduced.
6 year low GDP
India’s GDP growth reached 4.5 percent in the September quarter. This is the lowest level in the last 6 years. At the same time, the growth rate has been declining for 6 consecutive quarters. Not only this, the situation is not looking good in the future either. Several rating agencies, including Moody’s, have cut India’s growth rate estimates.
