After Standard & Poor’s, it’s the International Monetary Fund (IMF) which has disgraced governance issues to slow downing the business moderation project in economic growth affected investment, along with cyclical factors such as global uncertainty and policy tightening.
Criticizing governance issues for downgrading the India’s outlook standard, IMF in its Asia-Pacific Regional Economic Outlook on Friday said, “Concerns about governance and slow project approvals by the government have weakened business sentiment, which in turn has adversely affected investment, along with cyclical factors such as global uncertainty and policy tightening.”
Weak domestic infrastructure, less education opportunities are responsible for downing Indian economic in the second half of 2011, also the lowered forecast by the multilateral agency to 6.9 per cent in GDP from its January estimate of 7 per cent .
IMF, however, said that GDP growth is expected to pick up to 7.3% in 2013 and the financial reforms in the 2012-13 Budget to expand the use of public-private partnerships is prove to be significant for Indian economy, which is relatively less integrated with the world economy.
Beside all this, one thing to be good for India is moderate and low inflation expectation, and if financial reforms would be measured correctively, then reduction in fuel subsidy, fiscal consolidation, boosting infrastructure and spurring investment outcomes are surly in hands.
For India, it is mandatory to improve investment climate, remove infrastructure bottlenecks to make high progress pace by changing reforms, reducing limitations in trade, in order to maximize the potential of its continuing demographic dividend.