IMF: GST will raise growth to over 8%
Says the country is making progress on key economic reforms
Washington, April 28: The Goods and Services Tax (GST), which will be implemented from July 1, would help raise India’s mediumterm growth to above eight per cent, the IMF has said. It, however, expressed concern over the health of the country’s banking system.
Observing that India is the “fastest growing emerging market economy” in the region, Tao Zhang, deputy managing director of the IMF, said the organisation believes India would continue to grow at a fast pace, with a projected 6.8 per cent rate for financial year 2016-17 and 7.2 per cent in 2017-18.
Mr Zhang said a key concern for the IMF in India is the health of the banking system which is still dealing with a large amount of “bad loans”.
Washington, April 28: The ambitious Goods and Services Tax to be implemented from July 1 would help raise India’s medium-term growth to above eight per cent, the International Monetary Fund has said, adding that the reforms being done is expected to pay off in terms of higher growth in the future.
“The government has made significant progress on important economic reforms that will support strong and sustainable growth going forward,” Tao Zhang, deputy managing director of the International Monetary Fund, said.
“We expect that the goods and services tax (GST), which is targeted to be applied starting in July, will help raise India’s medium-term growth to above 8 per cent, as it will enhance production and the movement of goods and services across Indian states,” the IMF official said.
“We are extremely impressed by the work that is being done and that we expect it will pay off in terms of higher growth in the future,” he said in response to a question on the reforms being undertaken by the Indian government.
Observing that India is the “fastest growing emerging market economy” in a region that
The International Monetary Fund says that India is going to continue to grow at a fast pace, with a projected 6.8 per cent rate for 2016/17 and 7.2 per cent in 2017/18
remains the strongestgrowing in the world, Mr Zhang said the IMF believes that India is going to continue to grow at a fast pace, with a projected 6.8 per cent rate for Financial Year 2016/17 and 7.2 per cent in 2017/18.
Lower global oil prices have boosted economic activity, and helped lower inflation. In addition, fiscal and monetary policies have helped foster economic stability, he said.
“The currency exchange initiative led to a slowdown in economic activity. However, there are initial signs of recovery as the currency exchange has been progressing well,” said Mr Zhang, who assumed the role of deputy managing director at the IMF on August 22, 2016.
Mr Zhang, who worked at the World Bank from 1995 to 1997 and at the Asian Development Bank from 1997 to 2004, said a key concern for the IMF in India is the health of the banking system, “which is still dealing with a large amount of bad loans”, as well as “heightened corporate vulnerabilities” in several key sectors of the economy.
“As India persists with its strong reform efforts, labour market reforms should take priority,” he noted.