IMF favours three structural reforms in India

 

The IMF has suggested a three pronged approach for structural reform in India that includes addressing the corporate and banking sector weaknesses, continued fiscal consolidation through revenue measure, and improving the efficiency of labour and product markets.

Addressing the corporate and banking sector weaknesses: To address the corporate and banking sector weaknesses, by accelerating the resolution of non performing loans, rebuilding the capital buffers for the public sector banks, and enhancing banks’ debt recovery mechanisms.

Continued fiscal consolidation through revenue measure: India should continue with the fiscal consolidation through revenue measures, as well as further reductions in subsidies.

Improving the efficiency of labour and product markets: To maintain the strong momentum for structural reforms in addressing the infrastructure gaps, improving the efficiency of labour and product markets as well as furthering agricultural reforms.