After the Indian economy was hit by demonetisation, it is expected to grow strongly and remains gleaming in the global landscape, a senior IMF official has said.
“The Indian economy is growing strongly and remains a bright spot in the global landscape,” the IMF mission chief for India, Paul Cashin said.
With the global reduction of oil prices which began in late 2014, in turn, helped economic activities in India. Further improved the external current account and fiscal positions, and helped lower inflation, said, Cashin. Notably, reducing government deficits and debt accumulation, and an anti-inflationary monetary policy stance have helped cement macroeconomic stability of Indian market, he added.
Cashin also assured that the upcoming implementation of goods and services tax will help raise India’s medium-term growth to above 8%. Appreciating the government for the noticeable progress they have made with regards to implementing necessary economic reforms, he says, will strengthen the sustainable growth India is looking forward to. GST will enhance the efficiency of production and movement of goods and services across Indian states, he said.
Marking minor inconvenience, he says that the note-ban scheme which resulted in a strong shortage of cash has disrupted economic activities.
“A key concern for us is the health of the banking system, which is still dealing with a large amount of bad loans, and also heightened corporate vulnerabilities in several key sectors of the economy,” he said.
Responding to a question on demonetisation,