Washington: The ambitious product and Services Tax to be enforced from national holiday would facilitate raise India's medium-term growth to higher than eight p.c.
The International money has aforesaid adding that the reforms being done are predicted to pay off in terms of upper growth within the future.
"The government has created vital progress on vital economic reforms which will support sturdy and property growth going forward," Tao Zhang, Deputy decision maker of the International money, told PTI in an associate exclusive interview.
"We expect that the goods and services tax (GST), which is targeted to be applied starting in July, will help raise India's medium-term growth to above 8 percent, as it will enhance production and the movement of goods and services across Indian states," the IMF official said.
Observing that India is the "fastest growing emerging market economy" in a region that remains the strongest-growing in the world, Zhang said the IMF believes that India is going to continue to grow at a fast pace, with a projected 6.8 percent rate for Financial Year 2016/17 and 7.2 per cent in 2017/18. Lower global oil prices have boosted economic activity and helped lower inflation. In addition, fiscal and monetary policies have helped foster economic stability, he said.
"The currency exchange initiative led to a slowdown in economic activity.
Zhang, who worked at the World Bank from 1995 to 1997 and at the Asian Development Bank from 1997 to 2004, said a key concern for the IMF in India is the health of the banking system, "which is still dealing with a lot of bad loans", as well as "heightened corporate vulnerabilities" in several key sectors of the economy.
"As India persists with its strong reform efforts, labour market reforms should take priority," he noted. These would facilitate greater and better quality jobs, raise female labour force participation, and enhance the impact of recent product market reforms, he observed.
"While there has been vital progress usually, we tend to see scope to pursue higher targeting and bigger potency of grant and social disbursement programs through the bigger use of the trio of Aadhaar distinctive beneficiary identification, direct profit transfers, and data technology," Zhao said.
"Finally, more could be done to raise agricultural productivity and enhance market efficiency.
This would help increase the supply of high-value foods, enhance returns to farmers, and dampen food inflation pressures," said the IMF official responding to a question.