Describing the ongoing Goods and Services Tax (GST) reform as an act of courage, IMF chief Christine Lagarde today said she expects some positive outcome as a result of the decision. The GST reform is really an act of courage,” Lagarde told reporters during the annual Spring meeting of the International Monetary Fund and the World Bank. It really means reforming in-depth in each of the Indian States in order to substitute the State taxes with overall federal tax, the re-allocation of it and the digital platform that supports it, she said. “So, I am personally impressed by the work that is being done in that regard and expect some positive outcome, Lagarde said in response to a question, adding that she is impressed by the other reforms being carried out by the Indian Government.
There has been other reforms as well that has been conducted by the Indian authorities courageously. One of them -– as a former lawyer I am particularly attentive to because it particularly when you have to deal with the corporate sector banking sector that means help — is the bankruptcy reform,” the 61-year-old IMF chief said. We are seeing significant development and clear determination to continue and sustain growth going forward, she said.
Lagarde said the situation in the country after demonetisation has improved significantly. We have slightly revised down our Indian projection as a result of demonetisation that has been announced recently a little bit unexpectedly. Our understanding is that demonetisation has now remedied about 75 per cent. Those are the latest figures that we have, she said.
So clearly the situation is now being mended. And we believe that India is going to continue to grow at a really fast pace. I think, we have 7.2 per cent forecast for 2017, Lagarde said. Touted as the biggest taxation reform since India’s Independence, the GST will subsume central excise, service tax, Value Added Tax (VAT) and other local levies to create an uniform market. GST is expected to boost India’s GDP growth by about 2 per cent and check tax evasion.