Gita Gopinath, chief economist of the International Monetary Fund and the first woman to occupy the post, on Monday said that proper implementation of the Goods and Services Tax is a work in progress.
NDTV quoted Gopinath as saying, “The indirect tax revenues which have come in are weaker than were expected, which is partly a reflection of how it was rolled out and the implementation issues with that and that would continue to have to be fixed.”
IMF is also looking at agricultural distress in India. “We have some serious stress in the agricultural sector and that is another area we will need to do a lot better on. It should not take the form of loan waivers but in the form of cash support, but not necessarily in the form of input subsidies,” said Gopinath.
These comments come after reports claim that Prime Minister Narendra Modi’s administration is planning a cash handout to the country’s distressed farmers.
Regarding that, Bloomberg reported on Monday the plan to give cash to farmers instead of subsidies will have an additional cost of roughly Rs 70,000 crore to the exchequer annually after a full roll-out of the programme.
Gopinath pointed out that the overall state of India’s economy was positive despite the IMF’s revised World Economic Outlook. Global growth has fallen from 3.7 per cent last year to 3.5 per cent in 2019.
As Gopinath points out in her interview, India appears to be well insulated from the global risks. “India’s growth for 2019 is forecast to be 7.5 %. That puts India in the bracket of one of the fastest growing economies, large economies of the world. The Indian economy is quite healthy. We revised it up slightly and that was because of lower commodity prices and the effect that that would have on monetary policy,” Gopinath told NDTV.