Indian Economy To Grow At 5.6% This Year

The International Monetary Fund (IMF) has said that India's economy has recovered from a slump. On account of better exports and investment prospects under the Narendra Modi-led government, IMF has increased India’s FY2014-15 growth forecast to 5.6%. This forecast is 0.2 percentage point higher from the projection made in April this year.

"In India, growth is expected to increase in the rest of 2014 and 2015 as exports and investments continue to pick up and more than offset the effect of an unfavourable monsoon on agriculture," the IMF said.

In its World Economic Outlook update, the IMF also said that India’s economy would grow at 6.4% the next year. "India has recovered from its relative slump, and, thanks in part to policy and a renewal of (economic) confidence, growth is expected to exceed five percent again," said IMF chief economist Olivier Blanchard.

The report comes as thumbs up to Prime Minister Narendra Modi, who had promised to revive India’s economy that grew just 4.7% last year. Modi has been trying to minimise red tape, attract foreign investment and bring in global firms to manufacture in India for his ‘make in India’ initiative.