New Delhi, Oct. 2 (PTI): The International Monetary Fund has projected an 8 per cent GDP growth rate for India in the medium term but said the country would require policies to improve labour market conditions for better job creation.

The IMF projection comes at a time when the Planning Commission has proposed a 9 per cent growth rate in the 11th Plan (2007-2012).

“The recent shift to a more investment-led growth pattern seems to have raised India's medium-term potential growth to around 8 per cent,” an IMF working paper on “Wild or tamed? India's potential growth” said.

Referring to downside risks, the IMF paper said, “The pace of investment could decline as well, to the extent it is underpinned by cyclical forces.” The paper said even productivity gains, which were pushing up India’s growth, could become volatile.