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Chairman of the 15th Finance Commission -- N K Singh has said the International Monetary Fund’s (IMF's) decision to revise India's potential growth forecast downwards to 6 per cent citing the coronavirus pandemic is a ‘gross under estimation’ and observed that calculations of growth potential are always problematic. He mentioned ‘The issue of our medium term growth potential projected by the IMF last week by recaliberating it from 6.25 per cent to 6 per cent, in my view, is gross under estimation.’

He said India's growth is projected at 9.5 per cent in financial year 2021-22 and 8.5 per cent in FY 2022-23, reflecting base effects and strong global growth. Potential growth is the rate of growth that an economy can sustain over the medium term without generating excess inflation.

Besides, he said there was a need to raise India's tax ratio, both from macroeconomic and redistributive perspective, and also enhance fiscal space for financing public outlays. Terming the implementation of Goods and Services Tax (GST) as a path breaking reform, he said revenue data in the last few months have also suggested encouraging revenue share from the GST.