Governance Issues and Red Tape Weaken India's Growth - IMF
"THE recovery continues, but it has weakened. In advanced economies, growth is now too low to make a substantial dent in unemployment. And in major emerging market economies, growth that had been strong earlier has also decreased," says the preface to the World Economic Report of the International Monetary Fund, released yesterday.
The Report states about India:-
In India, growth weakened more than expected in the first half of 2012, an outcome of stalled investment caused by governance issues and red tape, and a deterioration in business sentiment against the backdrop of a rising current account deficit and the recent rupee depreciation.
Growth in India is projected to average 5 to 6 percent in 2012-13, more than 1 percentage point lower than in the April 2012 WEO. The downgrade reflects both an expectation that current drags on business sentiment and investment will persist and a weaker external environment.
In India, where inflation is still high, monetary policy should stay on hold until a sustained decrease in inflation materializes.