The International Monetary Fund on Friday suggested that India should simplify and streamline the Goods and Service Tax in order to sustain its high growth rate, reported PTI. The other steps suggested by the world body include cleaning up the banking sector and introducing reforms in key markets like labour and land.
“It [GST] is a complicated tax to administer and to implement, so I think some suggestions that streamlining can be important,” said IMF’s Communications Director Gerry Rice. The IMF Board is scheduled to meet for its annual India meeting on July 18. “We will be releasing the staff report in relation to that board meeting and it will have detail [about GST].”
In October 2017, it had downgraded its forecast after India reported a string of declining numbers following the economic impact of demonetisation and the introduction of GST.
But in May, the world body in its “Regional Economic Outlook” report for Asia-Pacific said India’s gross domestic product – the value of all goods and services produced in a year – will grow at 7.4% in 2018 and 7.8% in 2019. India will remain the fastest growing economy among all 37 countries in the Asia-Pacific region in two years, according to the report. The economic growth forecast for China is 6.6% for 2018 and 6.4% the year after.
“We expect the recovery to continue in FY 2018-’19,” said Rice. “[Point] One, to revive a bank credit and enhance the efficiency of credit provision; by accelerating the clean-up of bank and corporate balance sheets and enhancing the government of public sector banks. Point two, to continue fiscal consolidation and to lower elevated public debt levels supported by simplifying and streamlining the GST structure.”