India remains world's largest growing economy, says IMF

India remains the largest growing economy in the world, a senior official from the International Monetary Fund said, observing that the country's macroeconomic fundamentals are good. "India is said to remain the largest growing economy in the world. We project growth at seven per cent in FY24-25, supported by recovery in rural consumption, as there have been favourable harvests. Inflation is expected to decline to 4.4 per cent in FY24-25, despite some volatility as food prices normalize," Krishna Srinivasan, Director for the IMF Asia Pacific Department, told PTI in an interview on Tuesday.

In terms of other fundamentals, he said, "despite elections, the fiscal consolidation remains on track. Reserve position is pretty good. Macro fundamentals, generally speaking, for India are good".

He suggested that the country's reform priorities post-elections need to be in three areas.

"One is, there's an issue about creating jobs in India and so on. In that context, I think implementing the labour codes, which were approved in 2019-2020, are important because they will allow the labour markets to be flexible while giving social protection to workers," he said.

"The other thing is, if you want to be competitive, you also have to remove some of the trade restrictions you have right now. Because in India what's happening is, you know, when you liberalise trade, you allow the productive firms to survive. There's greater competitiveness and that by itself can, you know, create jobs. I think it's important that there's more trade restrictions removed," he said.

Emphasising the need for investment in skilling of workforce, Srinivasan said "in an economy which can generate a lot more jobs in the services sector, having the right kind of skills is important. So, investing in education, skilling the labour forces is very important".