There is hardly anything to derail the economic progress of India, as the underlying fundamentals of growth will not come off even if managing bumps along the way turns out to be challenging, a senior official of the International Monetary Fund said."To my mind, it is hard to see something that is significantly going to derail the progress. There are going to be bumps along the road and managing those bumps are going to be quite challenging," Kalpana Kochhar, senior advisor in the Asia and Pacific department of the Fund told PTI.
But the underlying fundamental growth story has been based on productivity, investments needs and the private sector and I don't see that coming off, Kochhar reasoned.
"It would not be unreasonable to assume that some of the credit market turmoil would spill over into India. Investment is the big story... that has been the one driving growth in the last couple of years and we need to continue that," Kochhar said.
"You could say that if there is a big crunch on the credit markets, India could be affected. But, you have to keep in mind that the banks' liquidity in India is still pretty high, and credit growth, although having come off, is still growing at 25 per cent," she added.
"India has benefited from some of the changes� that have been put in place but it is also a very important demonstration that developing countries have brought into this effort to broaden representation of the fund," Kochhar said.
Kochhar said, India has continued to be such an important contributor to the global economy, which in her view, was not even fully appreciated, and added: "There is a lot of focus on China and for very good reasons, but India is an equally big player."
"It (India) has not been such a big player in financial markets but it is a very big player in keeping up global growth," she said, pointing to the IMF forecasts for India.
"These are very good growth rates by any measure, coming off a blistering pace before, but still very good growth rates."
"In India itself, the short term focus is on Inflation. I think a combination of measures would have to be used and some have already been taken... As the Prime Minister himself said banning exports, controlling prices are very short term palliative type of measures to try to solve the problems," Kochhar said.
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