India will not need to fear losing its fastest growing economy tag to China, instead will see bigger growth rate numbers despite the demonetisation setback it faced last year, International Monetary Fund has said.
IMF's publication World Economic Outlook (WEO) that conducts surveys recently revised India's growth forecast for the financial year 2017 at 6.8 per cent.
Earlier, in its January review IMF downgraded India's growth estimate to 6.6 per cent on the account of demonetisation losses.
The organisation has retained India's growth forecast for FY18 at 7.2 per cent and FY19 at 7.7 per cent, well ahead of China that gets a forecast of 6.2 per cent for FY18.
The fund expects an uptick of economic activity in India especially after landmark structural reforms.
"Medium-term growth prospects are favourable, with growth forecast to rise to about 8 per cent over the medium term due to the implementation of key reforms, loosening of supply-side bottlenecks, and appropriate fiscal and monetary policies," the report said.
IMF also highlighted the need for policy action to reduce supply bottlenecks and boost financial stability by dealing with NPAs and raising Public Sector Banks' capital buffers.
Aditionally, it also called the need to secure public finances and structural reforms like the recently passed Goods and Services Tax.