Reforms in health, education & banking will benefit India: IMF
The Indian economy now seems to be on track to recover from the disruptions caused by the demonetization and deployment of GST, the IMF said on Sunday.
At the same time, the IMF has underlined the importance of reforms in other key sectors, such as education, health and improving the efficiency of the banking and financial systems.
India’s economy has expanded strongly in recent years, thanks to macroeconomic policies, emphasizing stability and efforts to address supply bottlenecks and structural reforms, interruptions of demonetization and implementation of The goods and services tax (GST) slowed growth.
“However, with the economy expanding by 7.2% in the last quarter, India regained the title of the fastest growing economy.” Calling this development a “welcome change,” Zhang said the growth prospects remain positive. “That said, the Indian economy would benefit from further reforms, such as improving health and education, encouraging private and public investment, and improving the efficiency of the banking and financial system.
This would support long-term growth. inclusive and would allow India to move towards the income levels of the richest countries.
Given the dominance of cash in day-to-day transactions in the Indian economy, it was inevitable that demonetization would temporarily affect economic activity, said Zhang, who will travel to India and Bhutan from March 12 to March 20.
The launch of the GST was a historic achievement that can be expected to increase the efficiency of the intra-Indian movement of goods and services, create a common national market, increase tax buoyancy and stimulate GDP growth and job creation, he said.
However, the complexities and flaws in the implementation of GST also resulted in short-term disruptions, as I mentioned before, the economy now seems to be on track to recover from these interruptions.
When asked about the latest Indian budget, which many critics say is protectionist, Zhang said that IMF research indicates that tariffs are generally contractionary, reducing production, investment, and employment.