Lower growth projection for India

WASHINGTON APRIL 9. The International Monetary Fund today lowered the growth projection for India to 5.1 per cent for 2003 and 5.9 per cent for 2004 against the earlier projections of 5.2 and 6.5 per cent respectively while urging the country to carry out several key reforms faster.

In its semi-annual World Economic Outlook released here, the IMF expressed concern that the large fiscal deficit, which has reached 10 per cent of the GDP, remains unchecked and establishing a credible fiscal consolidation strategy is imperative.

On the positive side, it said, notwithstanding a severe drought, India's economy grew by 4.9 per cent last year though 0.1 per cent less than projected and was higher than 4.1 per cent in 2001.

Welcome steps have been taken to further open the economy to foreign direct investment and move towards market-based pricing of petroleum products, but more progress is needed in pushing through other key reforms including early passage of the proposed fiscal responsibility legislation.