With economic growth slowing to a six-year low, IMF chief economist Gita Gopinath says the government should undertake structural reforms such as bank clean-up and labour reforms to address the slowdown in domestic demand.

Calcutta-born Gopinath, 48, who is travelling to India this week, rooted for government policies focusing on managing a slowdown in domestic demand and on boosting productivity growth and supporting employment creation in the medium term.

“Given the cyclical position and the structural challenges of the Indian economy at this point, we recommend that policies focus on managing the slowdown in domestic demand, and on boosting productivity growth and employment creation in the medium-term,” she said.

Recommending a series of key policy priorities for the Narendra Modi government, she said, “Politically, the time — early in the government’s second term — is right for a structural reform push.” GDP growth slowed for the sixth consecutive quarter in the July-September quarter to 4.5 per cent.