Home / Knowledge / News / Textiles / IMF says India must continue with reforms
IMF says India must continue with reforms
04
Mar '16
The International Monetary Fund (IMF) has cautioned that global financial market volatility, a potential further deterioration in exports, and strains in bank and corporate balance sheets could weigh on India's growth prospects. High fiscal deficits and upside risks to inflation constrain the scope for countercyclical policies.

It also said India's potential is enormous but it needs to continue with reforms to remain in the economic 'sweet spot' while reiterating its forecast that the country's growth will pick up marginally next year.

In its annual Article IV consultation report, the IMF underscored the need for continued vigilance, growth-friendly fiscal consolidation, and sustained reforms to enhance the resilience of the economy and bolster potential growth.

IMF Executive Directors who held consultation with Indian authorities said addressing supply constraints and further improving the business environment remain important priorities. Progress in these areas would have a positive impact on poverty reduction.

The Directors stressed the importance of preserving external stability. They noted that India's international reserves are assessed to be adequate. They agreed that, in the event of a surge in global financial market volatility, exchange rate flexibility remains a key shock absorber, complemented by judicious foreign exchange intervention. They encouraged the authorities to sustain the reform momentum to further enhance investor confidence and attract foreign direct investment, while cautiously liberalizing external commercial borrowings by the private sector.

The Directors welcomed the adoption of flexible inflation targeting and progress in enhancing monetary policy transmission. Given upside risks to inflation and still high household inflation expectations, they agreed that the monetary policy stance should remain appropriately targeted at ensuring durable reduction in inflation toward the medium-term target, supported by clear policy communication, continued fiscal consolidation, and measures to boost food supply. They encouraged the monetary authorities to stand ready to tighten the stance if warranted.

The IMF Directors welcomed the recent improvements in the quality and efficiency of public expenditure, as well as revenue-enhancing measures. They called on the authorities to articulate and implement credible measures that would underpin the achievement of the medium-term fiscal deficit targets and increase fiscal space for priority capital spending and social expenditures. Crucial in this regard are further reforms of fertilizer and food subsidies, a well-designed goods and services tax, and improved tax administration.

While acknowledging that India's financial system is generally sound, the Directors noted potential risks from weak corporate and bank balance sheets. They supported ongoing efforts to further enhance bank supervision, and encouraged the authorities to continue to strengthen prudential regulation for bank asset quality recognition, augment capital buffers and improve corporate governance at public sector banks, as well as enhance the bankruptcy and insolvency framework. (SH)

Fibre2Fashion News Desk – India


Must ReadView All

Market share of Indian textile items expand in 13 nations

Textiles | On 11th Dec 2017

Market share of Indian textile items expand in 13 nations

Thirteen countries — Germany, France, Italy, the United States,...

Bangladesh garment exports rise 7.46% in July-Nov '17

Apparel/Garments | On 11th Dec 2017

Bangladesh garment exports rise 7.46% in July-Nov '17

Readymade garment exports from Bangladesh increased 7.46 per cent in...

Cotton price increase is not sustainable: ITF

Textiles | On 11th Dec 2017

Cotton price increase is not sustainable: ITF

The increase in cotton price seen last week is only a short-term...

Interviews View All

Headhonchos
Indian fashion industry

Cotton consumption will keep growing in the Indian fashion industry

Riddhika Shah
SS Homme

'Worsted wool is the ideal fabric for menswear'

Sanjay Desai & Ashish Mulani
True Colors

Digital textile printing will be the technology of the future

Nitesh Mittal

Kusumgar Corporates is a leading manufacturer of technical textiles and...

Ravindra Jain, Ashish Baid

Oswal Prints Private Limited has been manufacturing and exporting ethnic...

Riddhi Jain

Conceived in Europe and curated in New Delhi, NeceSera is a...

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

December 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
69.2%
No
12.1%
Skip
18.7%

Total Votes: 91

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
61.5%
No
30.8%
Skip
7.7%

Total Votes: 91

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
86.8%
No
9.9%
Skip
3.3%

Total Votes: 91

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
81.3%
No
8.8%
Skip
9.9%

Total Votes: 91


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search