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The International Monetary Fund (IMF) has hailed the Centre's response in tackling the Covid-19 crisis. The IMF has called Prime Minister Narendra Modi's government's response to the Covid-19 pandemic 'Swift and substantial'. It said that India continued the labour response and privatisation despite the pandemic.

On the Indian government's handling of the pandemic, the IMF said it was "swift and substantial...has included fiscal support, including scaled-up support to vulnerable groups, monetary policy easing, liquidity provision, and accommodative financial sector and regulatory policies".

However, under Article IV of the multilateral agency, it sounded a note of caution saying that the economic outlook remains "clouded" due to pandemic-related uncertainties, contributing to both downside and upside risks. Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year.

This week, the IMF warned of rising threat to the global economic recovery posed by pandemic and an outbreak of inflation. The lending agency called for greater efforts from wealthy nations to boost coronavirus vaccination rates in poorer countries. It urged central banks to “act appropriately" if the price spikes prove to be more of a threat to the economic recovery.

In a "consultation" report the IMF said the negative impact of Covid-19 on investment and other growth drivers could prolong the economic recovery. But faster vaccination and better therapeutics could help contain the spread and limit the impact of the pandemic, IMF added.

The IMF has projected India's economic growth at 9.5% in FY2021-22 and 8.5% in 2022-23.

The IMF also pointed that the successful implementation of the announced wide-ranging structural reforms could increase India's growth potential.

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