The International Monetary Fund said India needs “ambitious” fiscal consolidation over the medium term in order to curb its public debt.

The government should boost revenue collection and spend more efficiently, which would allow for improvements in infrastructure and targeted social support, the Washington-based lender said in a statement on Tuesday.

The central bank’s current neutral monetary policy stance was “appropriate,” the IMF said, and should help bring inflation back to the 4% target.

On the currency, the IMF statement alluded to some disagreement between the authorities and IMF staff about the classification of the exchange rate, adding that currency intervention should be “limited to addressing disorderly market conditions.”

The IMF predicts India’s economy will expand 6.3% in the current fiscal year ending in March and the next year, but said it has the potential to grow even faster if the country undertakes key structural reforms.

  - Reuters