The slackening of economic growth in India has much to do with growing concerns over governance issues that have gradually weakened business sentiment in the country besides retarding investment flows, the International Monetary Fund (IMF) said in a report released today.
"Concerns about governance and slow project approvals by the government have weakened business sentiment, which in turn has adversely affected investment, along with cyclical factors such as global uncertainty and policy tightening," IMF said in its `Asia-Pacific Regional Economic Outlook' released today.
Calling for renewed efforts to revive India's flagging structural reform agenda, the IMF on Friday said governance concerns have weakened business sentiment in the country.
The multilateral lending agency also emphasised on the need for renewed efforts to restart financial reforms and broaden the use of public-private partnerships announced in the 2012-13 budget in order to revive India's flagging reform agenda.
IMF also lowered India's growth forecast to 6.9 per cent for 2012 from 7 per cent projected in January.
''While emerging Asia will remain the fastest growing region in the world, led by China and India, expanding at 6.9 per cent this year, industrial Asia is projected to grow only at 2.2 per cent, '' the report said.