Reforms carried out by India has been bearing fruits and benefiting people said a top IMF official. David Lipton, First Deputy Managing Director of the International Monetary Fund, said despite a bumpy road, implementation of the Goods and Services Tax, will help secure the solidity of foundation of public finances. He said recent steps taken to deal with the accumulated problems in banks are important ones, identifying digital ID technology and other structural reforms as important moves towards inclusive growth.
Speaking on the sidelines of the Spring meeting of the IMF and the World Bank, he said, “There's certainly more to be done but India is certainly seeing benefits from what it has done. India's reforms have been bearing fruits and we see that in growth performance. (India's) growth last year was 6.7 per cent. We're now projecting 7.4 this fiscal year and 7.8 the following. That's a very healthy acceleration and it really means for a country that is huge, adds up to an awful lot of economic activity.” Lipton added, “India's goal is to have sustained growth and to have a growth that boosts the living standards very broadly across the population. The reforms that have been carried out so far have had benefits and make a very good case for carrying forward with further reforms.”
The MD said a country of India's size has to be very careful to keep public finances under control because any interruption of economic activity that comes from fiscal difficulties would be a setback. Strengthening the foundation of fiscal finances with the GST is one reform that stands out. When asked if the reforms have been inclusive enough, he said the eco-system being built around digital ID technology offers a big help in this regard.
“There's been progress, but I think that this is a challenge that has not been solved yet and may not be solved for a while. But what makes sense is to carry on. I hope that in India's case, new technologies, some of which are already being applied can help overcome remoteness and can promote inclusivity, whether it's retina ID numbers system and the architecture of finance and commerce that's going to be built around that or some of the new fintech innovations that allow people to do commerce or banking, whether it's savings and earning on their savings or borrowing may be useful for the creation and building businesses through new technologies.”
