Suggesting steps to boost the economy’s growth, International Monetary Fund (IMF) chief Christine Lagarde advised India to take measure such as fighting corruption for improving business climate in the country. Christine Lagard further added that addressing bottlenecks of Indian economy should be given priority as there are a host of bottlenecks in many corners hampering investment in the country. The India’s economic growth slowed to decade low of 5 percent in 2012-13.
Referring to country’s fiscal deficit front, IMF chief stated that the government should focus on fiscal consolidation. The country’s fiscal deficit reached around 94 percent of the budgeted target in the first eight months of FY14. Meanwhile, the government has set target to contain the fiscal deficit at 4.8 percent of GDP in the current financial year.
On inflation front, Lagarde expressed hope that steps being taken by the RBI under new Governor Raghuram Rajan would help in improving the price situation in the country. WPI inflation eased to five month low at 6.16% in the month of December on y-o-y basis as against 14-month high of 7.52% in November. IMF chief further added that the RBI's proposal to target inflation is desirable as it has worked ‘quite well’ in many countries. Regarding the impact of US Federal Reserve tapering on India, Christine Lagard suggested that steps like attracting foreign investment and economic consolidation will help the country to deal with US Fed tapering programme.