Joining the conference call from New Delhi, Thomas Richardson, IMF's Senior Resident Representative, said India's financial system is fundamentally sound.

Responding to questions, Cashin argued there is no reason why India should not go back to 8-9 per cent growth rate.

"Traditionally India has grown at 7, 8, 9 per cent, and we see no reasons why it can't go back to those sorts of levels if some of the bottlenecks and structural reforms are introduced, which is presently holding back India's growth path," he said.

Setting the agenda for the next government to be formed after the general elections, Richardson on Thursday also emphasised on the need to focus on power generation, mining reforms in terms of pricing of natural resources as well; and better revenue.

"We think there are some structural things that they can do that would be growth positive, growth enhancing while also improving India's sustainability, reduced vulnerability, and so forth," Richardson said and called for reducing unproductive subsidies.

"One way that India can better target subsidies, not only fuel subsidies, but also food subsidies, is by moving forward with direct cash transfers linked to the unique identification system, that so called Aadhaar, that the government is pushing forward," he said.

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