IMF Shares Tips For India to Support its 7 Plus Per Cent Growth Rate IMF said India's growth is expected to rebound to 7.4 per cent in FY 2018-19 and 7.8 per cent in FY 2019-20

By Vanita D'souza

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Shutterstock

As India is all set to celebrate its first anniversary of goods and services tax (GST) tax on 1st July, the International Monetary Fund (IMF) said the country needs to simplify its the tax structure to support its 7+ per cent growth rate.

Last year in April-July, in the World Economic Outlook report, the IMF has predicted that India would grow at 7.2 per cent in FY 2017-18. However owing to the long-lasting impact of demonetization and thereafter the implementation of the GST and its aftermath, the international body downgraded India's growth rate to 6.7 per cent in October.

In May 2018, following temporary disruptions related to the currency exchange initiative (demonetization) and the rollout of GST, IMF said India's growth is expected to rebound to 7.4 per cent in FY 2018-19 and 7.8 per cent in FY 2019-20, making India once again one of Asia's fastest-growing economies.

"The recovery is expected to be underpinned by a rebound from transitory shocks as well as robust private consumption. Medium-term growth prospects remain positive, benefiting from key structural reforms, including the landmark national GST reform," the body said it's Regional Economic Outlook's Asia Pacific report.

Indian publication Business Today reported that in the emerging market and middle-income economies category, India has the second highest debt, after Brazil. However, the percentage is decreasing, from 68.9 per cent this year to 61.4 per cent by 2023 which means the country on the right track provided there are no more economic disruptions and the government delivers

Meanwhile, during IMF's fortnightly news conference in Washington, United States, Gerry Rice, Communications Director, IMF shared three tips for India to maintain its 7 plus growth story.

Tip 1 – Credit Efficiency

Rice's first advice to India was to revive a bank credit and enhance the efficiency of credit provision.

According to Rice, this can be done - "By accelerating the cleanup of banks and corporate balance sheets and enhancing the governance of public sector banks."

Tip 2 – Fiscal Consolidation

Rice's second suggestion to the Indian government was to continue fiscal consolidation and to lower elevated public debt levels supported by simplifying while streamlining the goods and services tax structure.

Tip 3 – Ease of Doing Business

IMF last advice to Indian was over the medium-term to renew impetus to reforms the key markets.

"For example, labour and land, as well as improving the overall business climate. We believe would be crucial to improving competitiveness and again, maintaining very high level of growth in India," Rice suggested.

Vanita D'souza

Former Senior Correspondent, Entrepreneur India

I am a Mumbai-based journalist and have worked with media companies like The Dollar Business Magazine, Business Standard, etc.While on the other side, I am an avid reader who is a travel freak and has accepted foodism as my religion.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Related Topics

Business News

He 'Accidentally Discovered' a Semi-Passive Side Hustle in College — Now He's on Track to Make More Than $500,000 This Year

When a lack of funding put a stop to Zach Downey's pizza vending machines, he stumbled upon another lucrative idea.

Business Ideas

55 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Thought Leaders

46 Facts You Should Know About Entrepreneurship (Infographic)

Before embarking on your entrepreneurial journey, check out this handy graphic.

Branding

6 Tips for Successfully Communicating Your Personal Brand

Follow these simple guidelines to stand out from the crowd and effectively broadcast your own personal brand to the world.

News and Trends

Dubbing Platform dubpro.ai Raises USD 500k from Venture Catalysts, 9Unicorns and Others

Noida-based dubpro.ai provides innovative AI-driven dubbing solutions that allow creators and businesses to easily localise their video content.

Marketing

The Rules of SEO Are Changing — Here Are 5 Powerful Strategies to Help You Rank in 2024

Do you need help to rank well on Google due to new algorithm updates? Discover five SEO strategies that work in 2024.