India's economy recovering, reforms vital, says IMF

The International Monetary Fund on Wednesday called the Indian economy a “bright spot” in the global landscape as one of the fastest growing big emerging market around.

The International Monetary Fund Wednesday called the Indian economy a “bright spot” in the global landscape as one of the fastest growing big emerging markets around.

Projecting a growth rate of 7.25% for 2015-16 — compared to over-8% forecast by the Economic Survey — the fund said the Indian economy is growing faster than expected.

The growth figures show “economic recovery in India is underway … somewhat faster pace than we, and others, previously believed,” said Paul Cashin, fund’s India mission chief.

He added that if the structural reforms needed are introduced “there is certainly no reason why Indian could not resume 8, 9 or even higher growth path gong forward”.

India’s own growth projections have differed from the fund’s in the past, sometime leading to acrimonious exchanges with the Indian government publicly questioning the formula.

Numbers aside, the IMF’s report — officially called 2015 Article IV Consultation with India — is extremely bullish on the Indian economy and current policies.

“The Indian economy is reviving, helped by positive policy actions that have improved confidence and lower global oil prices,” said the fund in a statement.

And these, the fund said, were the key areas needing attention.

Bottlenecks in the energy, mining and power sectors