The Indian economy now seems to be on its way to recovering from disruptions caused by demonetisation and rollout of the Goods and Services Tax, the IMF said.
At the same time, the IMF has underscored the significance of reforms in other key sectors like education, health and improving the efficiency of the banking and financial systems.
India's economy has expanded strongly in recent years, thanks to macroeconomic policies that emphasise stability and efforts to tackle supply-side bottlenecks and structural reforms. Disruptions from demonetisation and the rollout of the GST did slow growth," Tao Zhang, Deputy MD of IMF, said.
"However, with the economy expanding by 7.2% in the latest quarter, India has regained the title of the fastest-growing major economy, Zhang said.
Calling this development a "welcome change", Zhang said the growth prospects remain positive. "That said, the Indian economy would benefit from further reforms, such as enhancing health and education, encouraging private and public investment, and improving the efficiency of the banking and financial system. This would support durable and inclusive growth and enable India to move toward the income levels of wealthier countries, the top IMF official said ahead of his visit to India.
Since the opening of the economy starting in the early-1990s, India has benefitted from trade liberalisation, he observed. —PTI