GST Adoption To Push India’s GDP Growth Rate To Over Eight Per Cent: IMF

The Goods and Services Tax (GST), that the centre plans to implement from 1 July, will push India’s India’s medium-term growth to above eight per cent, the International Monetary Fund (IMF) has said.

“We expect that the goods and services tax (GST), which is targeted to be applied starting in July, will help raise India’s medium-term growth to above 8 per cent, as it will enhance production and the movement of goods and services across Indian states,” the IMF official added.

Zhang said that said the Indian government has succeeded in making significant progress in implementing economic reforms, which will support strong and sustainable growth in future.

The deputy director also said the health of the banking system in India remains a concern for the IMF and noted that it is “still dealing with a large amount of bad loans”. He also called for labour market reforms and said that the issue should be taken on priority basis as the government moves forward with its strong reform efforts.

He highlighted the importance of efficient spending in subsidy and social spending programs through greater use of the trio of Aadhaar unique beneficiary identification, direct benefit transfers, and information technology.