The headquarters of the International Monetary Fund in Washington, US: AFP
The headquarters of the International Monetary Fund in Washington, US: AFP

The International Monetary Fund has said it sees the Indian economy as a “long run source of global growth” and calls for the speeding up of structural reforms in the country.

The IMF’s mission chief for India Ranil Salgado notes that the country now contributes to nearly 15% of the growth in the global economy. He foresees growth of 7.3% in the fiscal year 2018/19 and 7.5% in 2019/20, based upon strengthening investment and robust private consumption, reports Press Trust of India.

Salgado feels India has three decades before it hits the point where the working age population starts to decline. This, he maintains, constitutes India’s window of opportunity, the agency added.

India needs to reinvigorate reform efforts to maintain growth and employment, Salgado said, going on to state that this is critical in a country whose per capita income is only about US$ 2,000, still well below that of other large emerging economies. 

He also said the Indian economy was recovering from the twin shocks of demonetization of its high value currency in 2016 and introduction of a Goods and Services Tax, which will benefit the country in the long run.

The IMF has, however, cautioned India against macro-financial risks which emerge from government ownership of public sector banks and suggested that it should consider privatization of such major financial institutions.

The organization also flagged the nation’s vulnerability to a rising imports bill, caused in particular by increasing oil prices and global protectionism.