Indian Economy is one of bright spots of global economy - IMF Chief
YESTERDAY, the IMF Chief Christine Lagarde answered several questions on Twitter. One of the questions was, What's your opinion about the Indian economy?
Her answer: The Indian economy is one of the bright spots of the global economy, at 7.5 per cent it's growing really nicely. It has the benefit of the low oil prices, and the benefit of a good policy mix that combines fiscal, monetary and structural reforms. Of course, more needs to be done, and in particular on the infrastructure reforms we hope that it will achieve even more success.
The IMF Chief commented on several issues. Some of them:
The Panama Papers have disclosed a lot of very sophisticated tax avoidance practices on a very broad scale. This needs to change. The IMF will participate and co-operate with other international institutions to offer new mechanisms that will be out of the box. They will be based on transparency, simplicity and co-operation.
The global economy continues to struggle with the “legacy of crisis” created by the 2008 financial recession.We are on alert but not on alarm. The global economy is recovering…but what we see is growth that is too slow and too fragile. It's too slow and too fragile to respond to the demand of 200 million people who are looking for jobs. It's too slow and too fragile to increase the standard of living of people who would like to see it grow, and it's too fragile and too slow to continue to eliminate poverty around the world.
The IMF is encouraged to see China opening to the rest of the world, even as it shifts from an export economy to a local market and from an industry-driven economy to service-driven economy. This is an economy going through a massive transition.We see all of that as transformational, difficult to manage, but manageable.
Developing countries are the main victims of these legal financial techniques that deprive them of vital funds.They are the ones, relied the most on corporate income tax and they are the ones who lose out to the great creativity and inventiveness of the multinationals.
Not the one eyed king
: Meanwhile RBI Governor Raghuram Rajan's comment, "I think we have still to get to a place where we feel satisfied. We have this saying -- 'In the land of the blind, the one-eyed man is king'. We are a little bit that way" drew flak from at least two union ministers.
Jayant Sinha, minister of state for finance, said yesterday that he does not agree with Reserve Bank Governor's comment. He said, "We are the shinning star. I don't agree with what the governor said".
Another Minister, Nirmala Sitharaman said, "I may not be happy with his choice of words. I think whatever action is being taken by this government is showing results. FDI is improving, there are clear signs that manufacturing sector is reviving. Inflation, current account deficit is under control ”