Reforms needed to sustain Indian growth - IMF

UNITED STATES: India needs to build infrastructure and reduce poverty faster to ensure it can sustain rapid economic growth, experts from the International Monetary Fund and World Bank said.

Charles Kramer, division chief of the Asia and Pacific Department of the IMF, said India must grapple for a balance between the rapid growth of as high as 8 percent it has achieved in recent years and dangers of overheating.

Potential for sustained growth is underpinned by India’s young and growing workforce and a high ratio of workers to retirees, increasing productivity and the modernization of its financial system that has seen credit expand, he said.

However, signs of inflationary pressure can be seen in industrial capacity utilization hitting a 14-year high, rising wages and goods prices and the credit expansion, Kramer told a symposium at the Brookings Institution in Washington.

The IMF recommends that India continue policies to tighten an accommodative monetary policy, reduce public debt and modernize the financial sector while also addressing bottlenecks in water supply, electricity and transportation, he said.

Washington, Friday, Reuters