Re­forms mak­ing econ­omy re­silient to global shocks: Sub­hash Garg

Struc­tural changes in tax­a­tion, bank­ruptcy boost­ing ro­bust growth, says Sub­hash Garg


IN a world where dig­i­tal tech­nol­ogy is chang­ing the very fun­da­men­tals of labour and in­dus­try, In­dia’s eco­nomic af­fairs sec­re­tary Sub­hash Chan­dra Garg stressed on the need to recog­nise the im­por­tance of such changes at the an­nual meet­ing of the In­ter­na­tional Mone­tary Fund (IMF) and the World Bank in Bali, In­done­sia.

Garg went on to point out in other meet­ings on Satur­day, that In­dia has been em­bark­ing on a se­ries of struc­tural re­forms in or­der to in­crease eco­nomic re­silience in such an at­mo­sphere. Ac­cord­ing to him, struc­tural re­forms in ar­eas like tax­a­tion and bank­ruptcy are help­ing the In­dian econ­omy in build­ing its re­silience to global shocks and main­tain a ro­bust growth rate de­spite chal­lenges. Pru­dent pol­icy mea­sures have helped, Garg pointed out, adding that mea­sures be­ing un­der­taken now, will also help con­tain the stress cur­rently seen in fi­nan­cial con­di­tion tight­en­ing, and oil prices etc. In fact, the meet­ing of global fi­nan­cial lead­ers was wrapped up with warn­ings that coun­tries will need to brace for po­ten­tial risks aris­ing from trade dis­putes and other ten­sions.

For in­stance, the In­ter­na­tional Mone­tary and Fi­nan­cial Com­mit­tee, which ad­vises the IMF’s board of gov­er­nors, is­sued a com­mu­nique on Satur­day urg­ing coun­tries to keep debt un­der con­trol, engi­neer poli­cies to en­sure credit is avail­able in line with their lev­els of in­fla­tion and en­sure sus­tained eco­nomic growth “for the ben­e­fit of all.”

IMF mem­bers also pledged to avoid de­valu­ing cur­ren­cies to seek a trade ad­van­tage by mak­ing a coun­try’s ex­ports rel­a­tively cheaper. The IMF ac­tu­ally started the meet­ings with a down­ward re­vi­sion of its global growth es­ti­mate for 2018 from 3.9 per cent to 3.7 per cent. “I think it’s not in­con­sis­tent to have a plateaued growth and down­side risks that are the clouds on the hori­zon, some of which have be­gun to open up,” IMF Man­ag­ing Di­rec­tor Chris­tine La­garde said.

Sail to­gether and we will be stronger. Fo­cus on your poli­cies. Don’t drift and let’s co­op­er­ate as much as we can be­cause we will be bet­ter off to­gether

Chris­tine La­garde, IMF Man­ag­ing Di­rec­tor

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