IMF says adoption of Goods and Services Tax (GST) poised to raise India’s medium-term GDP growth to above 8%. The Fund in January cut its estimate of India’s economic growth by a percentage point in 2016-17 to 6.6% and by 40 basis points to 7.2% in 2017-18, blaming cash shortages resulting from demonetisation. ALSO READ | GST adoption could raise India’s GDP growth rate to over 8%: IMFIMF directors supported Indian efforts to clamp down on illicit financial flows, but noted the strains that have emerged from the currency exchange initiative. “Continued progress in reforms bodes well for a marked improvement in medium-term prospects, with the adoption of the goods and services tax (GST) poised to raise India’s medium-term GDP growth to above 8%,” IMF said. Risks to economic recovery include uncertainty in design and implementation of GST, and weak corporate and public bank balance sheets.

Source: Mint February 22, 2017 17:00 UTC