IMF advises India to bring more women work in formal sector; envisages growth rate at 7.4 percent in fiscal year 2018, 2019

New York, April 21: The short-term impact of implementation of demonetization and GST in the year 2016 and 2017 is on the brink of conclusion as Indian economy is all set to grow by 7.4 percent in the fiscal year 2018 and 2019. Notably, the forecast of International Monetary Fund (IMF) said that India will grow by 7.4 percent in the fiscal year 2018 and 2019.

 

The deputy director in International Monetary Fund (IMF) Asia Pacific Department, Ken Kang on Friday said, “In India, growth is forecast up to 7.4 percent in the fiscal year 2018 and 2019 as the economy recovers from temporary disruptions related to the currency exchange initiative and the rollout of the new Goods and Service Tax.”

However, he advised India to focus as a priority on ensuring that more women work in the formal sector as it continues with labour reforms. “While in recent years India has made very impressive progress in reforms," he said that "looking ahead there are important policy priorities" and listed three among them.

"One, is to continue improvements in product and labour market reforms with a focus on increasing formal female labour participation to improve the business environment, and reduce complex regulations, but also to address supply bottlenecks, particularly in the agricultural sector and distribution networks," Kang added.

Kang also mentioned the introduction of flexible inflation targeting and of a statutory monetary policy which has helped to strengthen the monetary policy framework. “The Reserve Bank of India Act was amended in 2016, to provide for a Monetary Policy Committee that decides on the interest rate required for achieving the inflation target set by the government in consultation with the bank,” he added.

“The other achievements include the Goods and Services Tax (GST) and the major recapitalization plan for the public-sector banks in order to accelerate the work out of nonperforming loans, as well as made some important legal improvements through a new insolvency and bankruptcy law," Kang said. "We expect and hope that the reform momentum continues," he said.

“In China, growth is expected to moderate to 6.6 percent in 2018 or .1 percentage point higher than expected in October as financial, housing and fiscal tightening measures take effect. In Japan, growth has been above potential for eight consecutive quarters and is expected to remain strong 1.2 percent this year. Actually today this year's 1.2 percent growth rate is 1/2 percent higher than we expected in October,” Kang concluded.