(Image source from: livemint.com)

The economic slowdown of an economy has to be reversed where the economy has been one of the engines of global growth in India. The International Monetary Fund said on Monday that India’s government must take steps quickly in reversing the action.

The IMF said in the annual review that the decline in the consumption and investment, and falling tax revenue, have been combined with other factors to put a pause on one of the fastest growing economies in the world

Ranil Salgado of the IMF Asia and Pacific department told the reporters that India is amidst the significant slowdown of economy after millions being lifted out of poverty.

Gita Gopinath, IMF chief economist said, India’s slowdown had “surprised to the downside,” and added to it saying that the fund is set so as to downgrade its estimated growth for the economy of India in the World Economic Outlook that is to be released next month.

The IMF predicted for 2019 to be nearly a full point to 6.1 percent while 7.0 percent for 2020.

The key lending rate has been cut by five times this year by the Reserve Bank of India (RBI). it has been cut to a nine-year low where as the policy has kept unchanged at the last meeting which was held earlier this month.

The forecast has been done by the central bank from 6.1 percent to 5 per cent based on the contracts of manufacturing activities and the demands of consumer.

According to the Indian government, the economy of India has grown in more than six years in the period of July-September from 7.0 percent to 4.5 percent a year ago.

Salgado said “the government needs to reinvigorate the reform agenda,” which includes the restoration of the financial sector so as to “ enhance its ability to provide credit to the economy.”

By Shrithika Kushangi