NEW DELHI: India’s economic growth will accelerate in the current and next fiscal years, the International Monetary Fund ( IMF ) said in its latest forecast, consolidating the country’s position as the world’s fastest-growing major economy and opening a wider gap with China , which is projected to slow.India’s economy is forecast to grow 7.4% in the current fiscal from 6.7% in FY18 and accelerate further in FY20 to 7.8%, shows the IMF’s latest forecast, which is unchanged from its October outlook. There will be a gradual increase in India’s growth rate as structural reforms raise potential output, the IMF said in its flagship World Economic Outlook released on Tuesday. China is forecast to slow from 6.9% in 2017 to 6.6% in 2018 and further to 6.4% in 2019.Global growth is seen stable at 3.9% over the current and next calendar years, almost unchanged from 3.6% in 2018.“Growth in India is projected to increase from 6.7% in 2017 to 7.4% in 2018 and 7.8% in 2019 (unchanged from the October WEO), lifted by strong private consumption as well as fading transitory effects of the currency exchange initiative and implementation of the national goods and services tax ,” the IMF said in the report. “Over the medium term, growth is expected to gradually rise with continued implementation of structural reforms that raise productivity and incentivise private investment,” it added. The Reserve Bank of India also expects the economy to grow 7.4% this fiscal.The IMF said India has made progress on structural reforms in the recent past and the implementation of the goods and services tax will help reduce internal barriers to trade, increase efficiency and improve tax compliance. The corporate debt overhang and associated banking sector credit quality concerns have exerted a drag on investment in India, the IMF said, adding that recapitalisation will improve the banking sector’s ability to support growth but more measures are needed.Recapitalisation, it said, should be part of a broader package of financial reforms to improve the governance of public sector banks and lenders’ debt recovery mechanisms should be further enhanced. While the medium-term growth outlook for India is strong, an important challenge is to enhance inclusiveness, it said.“The main priorities for lifting constraints on job creation and ensuring that the demographic dividend is not wasted are to ease labour market rigidities, reduce infrastructure bottlenecks, and improve educational outcomes,” it said. India’s per capita output growth will rise from 5.4% in FY18 to 6% this year, 6.4% in FY20 and further to 6.8% by FY24.“Income convergence is projected to continue in China, India, and east Asia more broadly, as well as in emerging Europe and parts of the Commonwealth of Independent States,” it said.The IMF said improvements to the monetary policy framework also appear to have lowered inflation expectations. It sees consumer inflation at 5% this year and the next while the current account deficit is seen at 2.3% of GDP this fiscal and 2.1% next fiscal against 2% in FY18.