Reforms undertaken by PM Modi are significant

Cornelia Mascio
Ottobre 13, 2017

Days after Narendra Modi was criticised for saying that low growth in one quarter was not a big issue, the World Bank chief on Thursday praised the Indian Prime Minister for the economic reforms that he levied in the country.

In fact, Jim Yong Kim called the reforms "significant" and went on to highlight the importance of the reforms in the long run, which was exactly what Modi had assured on October 4. "We think that certainly in the medium and long term, the growth will reflect the seriousness of Prime Minister Modi's government in making those reforms", he said.

Jaitley is on a week long official tour of the USA to attend the annual meetings of the International Monetary Fund (IMF) and World Bank.

The questioner had sought Kim's reaffirmation of his optimism about the Indian economy at a time when GDP growth had fallen to levels around 5.7 per cent, private investments have fallen and the World Bank itself reduced India's growth forecast for 2017 and '18.

"The implementation of the Goods and Services Tax (GST) from July 1 and its gradual complete transition, follow-up to demonetisation and enacting other structural reforms by the government would take the economy towards a higher growth trajectory", he said.

"The Finance Minister highlighted the structural reforms India has undertaken through a series of bold measures, including the Goods and Service Tax (GST), Financial Inclusion and action against the shadow economy", according to the press statement by the Press Information Bureau. So, our sense is that this is temporary. His approach was: we are going to move up quickly and we're going to do the things that we need to do to reform the business environment. So, we'll wait to see what happens on the Doing Business report this year, but we've been very encouraged with the reforms that he has already taken.

The secretary also met with the CEO, World Bank; CEO, Global Infrastructure Hub and the Executive Vice President and CEO, MIGA besides the India World Bank team led by Vice President South Asia.

On Wednesday, the World Bank stated that India's GDP may slow down from 8.6 per cent in 2015 to 7 per cent in 2017 because of disruptions by demonetisation and the GST, the International Monetary Fund has forecast India's growth projection to be 6.7 per cent in 2017.

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