Describing the two major recent reforms in India -demonetisation and Goods and Services Tax (GST) – as a monumental effort, Lagarde said it is hardly surprising that there “is a little bit of a short-term slowdown” as a result.
IMF chief Christine Lagarde described demonetisation and the rolling out of GST as a “monumental effort” and said it is hardly surprising that here “is a little bit of a short-term slowdown” as a result.
The Indian government has, however, received support from top leaders of the International Monetary Fund (IMF) and the World Bank who have called the slowness in recent Indian growth rate “an aberration” and a short-term one.
The reports of IMF pushing for UBI, in place of Public Distribution System (PDS), emerged after the IMF, in its annual Fiscal Monitor report, said the UBI will outperform the PDS in terms of coverage, progressivity, and generosity.
“First priority is to address the corporate and banking sector weaknesses, by accelerating the resolution of non-performing loans, rebuilding the capital buffers for the public sector banks, and enhancing banks’ debt recovery mechanisms,” said Kenneth Kang.
Investments in education and health help reduce income inequality over the medium term, address persistent poverty across generations, enhance social mobility, and ultimately promote sustainable and inclusive growth, the IMF official said.
While the International Monetary Fund (IMF) has lowered India’s growth forecast for the current fiscal by 0.5 percentage points to 6.7 per cent, the World Bank has pegged economic expansion at 7 per cent, down from 7.2 per cent projected earlier.
“In India, growth momentum slowed, reflecting the lingering impact of the authorities’ currency exchange initiative as well as uncertainty related to the midyear introduction of the country-wide Goods and Services Tax,” the IMF said.
In a pointed message before US President Donald Trump’s first G20 summit in Hamburg, Germany later this week, the IMF said in an economic briefing note to the leaders that a rules-based and open trading system was vital for world prosperity.
After participating in two previous international loans to save Greece from bankruptcy, the IMF is still set to take part in a third bailout.
IMF chief Christine Lagarde and the eurozone’s 19 finance ministers meet in Luxembourg with hopes riding high that the talks will secure the release of the latest tranche of Greece’s 86-billion euro (USD 97 billion) bailout agreed in 2015.
Overall, Ukraine has received USD 8.3 billion from the IMF since the package was approved in February 2015
According to the report, in India, improving productivity in the agriculture sector, which is the most labour-intensive sector and employs about half of Indian workers, remains a key challenge.
Egypt agreed the three-year programme with the IMF in November, after floating its Egyptian pound currency
Prior to joining the Fund in 2010 as a special advisor to the managing director, Zhu had served as deputy governor of the People’s Bank of China.