India is committed to have a sound macro-economic environment conducive to fuel growth and ensure inclusive development, Finance Minister Nirmala Sitharaman said on Saturday as IMF slashed India's growth rate to 6.1 per cent from 7.3 per cent for 2019.
Speaking at the annual meeting of the International Monetary Fund (IMF) here, Sitharaman said that India has taken diverse policy levers as part of Modi government's series of reforms to address the challenges being posed by slowdown in country's growth.
"Notwithstanding the very recent slowdown, our potential growth rate in the coming years is much higher. With a prudent mix of policies, we are committed to have a sound macro-economic environment conducive to fuel growth and ensure inclusive development,” she said.
"We, in India, have taken frontloaded action using diverse policy levers to address the challenges being posed by slowdown in country’s growth," she said.
As against India's real growth rate of 6.8 per cent in 2018, the IMF in its latest World Economic Outlook released on Tuesday, projected the country's growth rate at 6.1 per cent for 2019 and noted that the Indian economy is expected to pick up at 7 per cent in 2020.
Sitharaman said India has provided impetus to growth by rationalising and reducing corporate tax rates that will stimulate private sector investment in infrastructure and industry.
"We have also taken a number of sector specific measures to support growth. The Reserve Bank of India has also reduced policy rates five times this year by a cumulative 135 basis points recognising the policy space it had," she said.
"Supported by fiscal and monetary actions, an inflation trajectory in line with the inflation target and progressive structural reforms, we expect investment to revive, consumption to remain robust and growth to return to a higher trajectory soon," Sitharaman said.
Noting that there are risks at various levels which can adversely affect the growth momentum, Sitharaman said that it is pertinent in global economy to mention that external factors like trade tensions and other geopolitical uncertainties can have overwhelming deleterious effects.
"We need to think of ways whereby the IMF and other international organisations including the World Trade Organisation, as also this forum and the member governments can work towards evolving a mechanism to mitigate these risks and boost mutually beneficial engagements," she said.
As a dynamic economy, she said, India believes that it has a key stake in nurturing global cooperation.
"Hence, we reiterate our faith in the multilateral system to provide a platform for equitable partnership," she said.
During her address, the minister said the Indian economy has shown resilience against the global headwinds.
However, with the continuing subdued global demand conditions and a cyclical downturn in India that was exacerbated by some sector-specific issues, it has witnessed some slowdown in recent quarters, she noted.
Stating that the idiosyncratic sector-specific issues have since been substantially resolved, she said that the expected recovery has been reflected in IMF projections.
"The authorities have taken a series of growth-supporting measures including resolution of impaired assets of banking sector, bank recapitalisation, cut in the corporate income tax rate, resolution of NBFC liquidity stress and monetary easing that are expected to provide significant boost to investment as well as consumption," she said.