The International Monetary Fund (IMF) today said that GST (Goods and Services tax) set to be implemented from July 1, 2017 would certainly help raise India’s medium-term growth to above 8%. It was also added that the reforms being done are expected to pay off in terms of higher growth.
IMF Deputy Managing Director, Tao Zhang said that “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 eight per cent, as it will enhance production and the movement of goods and services across Indian states“. He further added that “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“.
Zhang also said that “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.”
Pointing to the Unique Identity Number scheme, Aadhar, he said that IMF “see scope to persue better targeting and greater efficiency of subsidy and social spending programs through greater use of the trio of Aadhar, direct benefit transfers and Information Technology.”
Replying to a question related to agriculture growth in India, he said “Finally, more could be done to raise agricultural productivity and enhance market efficiency. This would help increase the supply of high-value foods, enhance returns to farmers, and dampen food inflation pressures“.
A key area of concern for IMF was the bad loans that have shot up at Public Sector Banks. The indicative figure till January 2017 is approx. Rs.6.06 Crores. IMF is concerned that the Indian banks have still not worked out a system to cut down on the bad loans.
With GST set to roll out on July 1, 2017, economists are hopeful that it will prove to be for the good of Indian people and economy in the long run.