The IMF Executive Board, in its 2025 Article IV consultation released on November 26 in Washington, welcomed India’s labour reforms and highlighted the country’s strong economic resilience. The Board said the reforms support India’s push toward the Viksit Bharat goal but also flagged fiscal and financial risks that need continued policy attention.

BulletsIn

• IMF expects India to grow 6.6% this fiscal and 6.2% in FY27.
• Board praised India’s strong economic performance despite global uncertainty.
• Labour reforms seen as boosting structural transformation for Viksit Bharat.
• Board backed fiscal consolidation but warned deficit target needs discipline.
• IMF urged careful monitoring after GST simplification and lower tax rates.
• Suggested adjusting FY27 consolidation pace depending on US tariff impact.
• India disagreed with pause suggestion and reaffirmed fiscal targets.
• IMF called for stronger revenue mobilisation and efficient spending.
• Urged more oversight of state finances and contingent liabilities.
• Monetary advice included scope for easing, better transmission, flexible FX rate.
• Financial system seen stable, but NBFC vulnerabilities require monitoring.
• Board encouraged higher R&D, innovation and green-transition spending.