Adoption of GST tax will boost India’s medium-term growth: IMF
NEW DELHI : Asserting that India has shown that progress on reforms could initiate business investment, the IMF today said the adoption of goods and services tax is poised to enhance the country’s medium-term growth.
The IMF said in its latest Asia Pacific regional economic update that India’s strong reform push in 2016 is welcome and should continue apace.
Greater labour market flexibility and product market competition remain essential to create jobs and raise growth.
It said that priorities also include effective implementation of the new corporate debt restructuring mechanisms. The IMF opined that as shown by India, progress on reforms could initiate business investment, including already strong FDI inflows, which will further increase domestic demand.
Over the medium term, a number of Asian economies stand to benefit from a demographic dividend, as the working-age population in some economies like India and Indonesia continues to grow, potentially helping sustain strong potential growth.
The IMF said India’s growth has continued to benefit from the large improvement in terms of trade, positive policy actions, including implementation of key structural reforms, gradual reduction of supply-side constraints, and an enhancement in confidence.
