Washington, Sept. 27 (PTI): Days after scaling down India’s GDP growth forecast to 5 per cent for this fiscal, the International Monetary Fund said the Indian economy has the capability to move on to a higher 8 per cent growth GDP if reforms were stepped up.
“I believe, India is fully capable of growing at 8 per cent, which is necessary for poverty to be really reduced quickly. With correct policies, the growth rate, which is now around 5 per cent, could go higher to the level the IMF would like to see,” IMF first deputy managing director Anne Krueger said here.
There is no question India’s economic performance, especially in the later half of the 1990s, was very good but the growth rate since that time has slowed somewhat, she told a press conference presided over by IMF managing director Horst Kohler yesterday.
“In our judgement, the reasons for that slowdown have to do with some temporary factors, possibly also with the fact that the momentum of reforms has slowed,” she said.
The statement from Krueger assumes importance in the face of IMF scaling down India’s growth target to 5.0 per cent for this financial year from the earlier projection of 5.5 per cent.