The Indian economy is on its way to recovering from the temporary disruptions caused by demonetisation and the implementation of the Goods and Services Tax, a senior official of the International Monetary Fund said on Saturday.
IMF Deputy Managing Director Tao Zhang told PTI in an interview that the 7.2% Gross Domestic Product growth registered in the October-December quarter of 2017-’18 had regained India the title of the world’s fastest-growing major economy.
As cash transactions dominated India’s economic activity, Zhang noted that it was inevitable that demonetisation would affect growth, albeit temporarily. Although he called the implementation of GST a “landmark accomplishment”, he highlighted how the complexities and glitches in the system made it far from perfect.
The top official of the IMF will be in India and Bhutan from March 12 to March 20.
Zhang also highlighted how the Indian economy needed reforms in the health and education sectors, improvements in banking efficiency and encouragement of private and public investment. “This would support durable and inclusive growth and enable India to move toward the income levels of wealthier countries,” he told the news agency.
In December, too, the IMF had said that demonetisation had caused temporary disruptions in India’s economy – primarily affecting private consumption and small businesses – but those effects were gradually disappearing.