India poised as world's fastest growing economy: Lagarde

Tuesday 17th March 2015 12:57 EDT

Internation Monetary Fund (IMF) managing director Christine Lagarde said India was on its path to becoming the world's fastest growing economy, as she bagan her two-day visit to the country. "Wondeful to be back in vibrant India - poised to become world's fastest growing large economy," Lagarde tweeted, as the multilateral funding institution predicted a 7.25 per cent growth for the country this fiscal, rising to around 7.5 per cent the next year.

As per IMF officials here, Lagarde's itinerary during her two-day India visit, which takes her to Mumbai, includes meetings with Prime Minister Narendra Modi and key leaders such as Finance Minister Arun Jaitley and RBI Governor Raghuram Rajan.

In addition, she is scheduled to deliver a speech at Lady Sri Ram College in New Delhi besides attend a public event hosted by the central bank in Mumbai. She then travels to China on a five-day visit.

Lagarde welcomed the government's latest budget as "a step in the right direction", and singled out higher infrastructure spending for praise. A pact between the government and the Reserve Bank of India to formalise inflation targeting "should provide a robust institutional foundation for maintaining price stability", Lagarde said in a speech to women students.

But to anchor long-term growth and employ a workforce that will grow to become the world's largest by 2030, India needs to open up its labour market to women, boost financial inclusion and invest even more in infrastructure, she said.

Lagarde cited a new IMF working paper which found that only 33 per cent of women in India worked - below the global average of 50 per cent and the average in East Asia of 63 per cent.

Not only is female participation in the labour force low, but it has been declining since 2005. Lagarde called this a "huge missed opportunity" and called for urgent remedies.

In an interview she said India was better positioned to cope with external financial shocks than most emerging market economies.

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