08 Aug 2018
India, source of growth for global-economy for next few-decades: IMF
India is a source of growth for the global economy for the next few decades and it could be what China was for the world economy, the IMF said.
"India now contributes, in purchasing power parity measures, a substantial 15% of the growth in the global economy, next to only China and the US," Ranil Salgado, International Monetary Fund's mission chief for India said.
Salgado says India has 30yrs before working-age population declines
Salgado said the IMF views India as a long run source of global growth.
"India has three decades before it hits the point where the working-age population starts to decline. So that's a long time. This is India's window of opportunity in Asia. It's somewhat only a few other Asian countries have," the IMF mission chief for India said.
India recovering from demonetization and GST implementation: Salgado
"The Indian economy is recovering from the two shocks, demonetization and implementation issues related to the GST. We see growth recovering. Generally, India is benefiting from good macroeconomic policies, stability-oriented policies as well as some important reforms done in recent years," Salgado said.
Although there are short-term issues, the IMF views that as a long-term major gain for India by implementing a national GST.
Salgado talks about other achievements by India
Insolvency and Bankruptcy Code is the other big achievement, Salgado said.
"We are seeing certain positive steps there and we hope that can continue," he said.
"The third (big achievement) is the inflation targeting framework that India now have in the Reserve Bank of India, formally adopted in 2016. We have seen the benefits of that have lowered inflation and inflation expectations," he said.
Salgado says things are looking positive for India
Salgado said that for India, things are relatively positive.
"It takes good policies to create jobs, to create even stronger economic growth. 7-8% growth is very good. It's one of the best in the world. But for India, which is appropriately aspiring to quickly catch up with the richer advanced countries, you need even stronger growth," Salgado said.
IMF advises to continue structural reforms
"The second message, we are saying that steps to structural reforms have to continue and, in some ways, have to even take a step further up," Salgado said identifying labor reforms, improving the business climate, and enhancing infrastructure as key areas for continued reforms.
And finally, it is important to finish the cleanup of the bank and corporate sector balance sheets, he said.
IMF releases report of annual consultations with India
IMF Executive Board released the report of its annual consultations with India, which has forecast India's growth to rise to 7.3% in FY2018/19 and 7.5% in FY2019/20, on strengthening investment and robust private consumption.
Implementing national GST, a big achievement for India: Salgado
"Implementing national GST is something that's difficult to do. Other countries have struggled. In India, it's much more complex because you have 29 states and 7 union territories and you need an agreement. I think that that was a great achievement," Salgado said.