Gita Gopinath, the Chief Economist of the International Monetary Fund said that proper implementation of the Goods and Services Tax is a work in progress and agricultural distress in India is another key area that the IMF is looking at. She said that 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
Her comments come when reports say Prime Minister Narendra Modi’s administration is planning a cash handout to the country’s distressed farmers.
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.
Ms Gopinath pointed out that the overall state of India’s economy was positive despite the IMF’s revised World Economic Outlook. Global growth has been revised downward to 3.5 per cent in 2019 from 3.7 per cent last year. She said that 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.
