Washington sources have stated that the IMF has suggested a three-pronged approach for structural reform in India that includes addressing the corporate and banking sector weaknesses, continued fiscal consolidation through revenue measure, and improving the efficiency of labour and product markets. Meanwhile the Deputy Director Asia Pacific Department of IMF, Kenneth Kang, said the favorable outlook for Asia was an important opportunity for India to push forward with difficult reforms.
Kang, Deputy Director Asia pacific Department IMF said "As such, there should be three policy priorities in the area of structural reforms". He said "First priority is to address the corporate and banking sector weaknesses, by accelerating the resolution of non- performing loans, rebuilding the capital buffers for the public sector banks, and enhancing banks' debt recovery mechanisms".
Meanwhile according to IMF's Regional Economic Outlook, India's growth
slowed in recent quarters due to the temporary disruptions from the currency
exchange initiative demonetization that took place in November 2016, and the
recent roll-out of the Goods and Services Tax (GST).
