The International Monetary Fund (IMF) supported India's recent decision to reduce corporate income tax, saying it has a positive impact on investment. powered by Rubicon Project It, however, said India should address continued fiscal consolidation and secure long-term stability of the fiscal conditions.

"We believe India still has limited fiscal space so they have to be careful. We support their corporate income tax cut because it has a positive impact on investment," Changyong Rhee, Director, Asia and Pacific Department, IMF, told reporters at a news conference here.

Following a marked slowdown in the last two quarters in India, the economy is expected to grow at 6.1 per cent this fiscal year, picking up to 7.0 per cent in 2020, he said.

"The monetary policy stimulus and the announced corporate income tax cut are expected to help revive investment," said the top IMF official. Anne-Marie Gulde-Wolf, Deputy Director, Asia and Pacific Department, IMF, said India should address the non-bank financial sector issues.