India a bright spot, but reform implementation holds key: IMF
New Delhi: Describing India as a bright spot in the “cloudy” global economy, IMF chief Christine Lagarde today said much still needs to be done to boost private investment in the country and the reform measures must be on the “actions list” now.
Lauding steps towards subsidy reforms and implementation of the Goods and Services Tax, Lagarde also said: “Those reforms are bold but we need resilient implementation. It is always key to success around the world…. yes, it is a case here as well.”
Listing labour reforms as a starting point for making doing business easier, she said stable regulatory regime is also a prerequisite for boosting private investment.
“Much needs to be done in easing land acquisition, expediting clearances and establishing a stable regulatory regime so that the private sector can invest. These issues are on the radar of policymakers, which is promising, they must be on the action list,” she said while speaking at a function at Lady Sri Ram College here.
Urgent remedies are needed to push growth, she said, adding that “a good starting point is to make Indian labour markets more flexible”.
Commenting on India’s prospects, she said: “In this cloudy global horizon, India is a bright spot. Recent policy reforms and improved business confidence have provided a booster shot to economic activity,” she said
On economic growth front, she said using India’s new GDP series, the IMF expects the economy to pick up to 7.2 per cent expansion this fiscal and accelerate further to 7.5 per cent next year “making India the fastest growing large economy in the world”.
The IMF chief further said, “Indeed, a brighter future is being forged right before your eyes. By 2019, the economy will more than double in size compared to 2009.”
When adjusting for differences in purchasing prices between economies, India’s GDP will exceed that of Japan and Germany combined, she said adding it will also exceed the combined output of the three next largest emerging market economies —- Russia, Brazil, and Indonesia.
Lagarde further said, “Just as many countries around the world are grappling with low growth, India has been marching in the opposite direction.”
Praising India’s talents in diverse fields and its cost-effective ways for success, she said India has not only become a leader in IT and managed to find the most cost-effective way to send a mission to Mars, “it also gave us yoga, ayurveda, Bollywood and chicken tikka masala! This is a special moment for India”.