In a pat to the NDA government which has been facing flak for slowing growth, World Bank President Jim Yong Kim on Thursday lauded reforms by Prime Minister Narendra Modi and indicated it would be reflected in India’s ranking in the Ease of Doing Business report
“Prime Minister Modi took a very different approach to the Doing Business report and took substantial reforms. We are very encouraged by this,” he said in response to a question by BusinessLine.
While declining to give a policy prescription for India as the “government has already prioritised its agenda”, Kim said that economic growth in the medium and long term will reflect the progress from the reforms.
The World Bank in its recent growth outlook has lowered India’s GDP forecast to seven per cent due to disruptions from the Goods and Services Tax and demonetisation and has also underlined weak private investment as a key challenge.
However, Kim said that GST will be good for Indian economy. “Companies are waiting for it to stabilise before taking more action on investments and expansion,” he said.
“India has been talking about GST for a long time…well before Prime Minister Modi,” he noted, adding that the GST will boost growth as it will cut down delays in truck movement and integrate the country into a national market.
Last week, Kim had said that India’s economic slowdown, with GDP growth hitting a three-year low of 5.7 per cent in the first quarter was only “temporary and an aberration”.
Addressing a press conference at the launch of the Annual Meetings of the World Bank and International Monetary Fund, Kim said the global economy is picking up and trade is also increasing but private investment remains weak.
He also urged countries to invest in human capital.
(The writer is in Washington DC as part of the IMF Journalism Fellowships 2017 to cover the annual meetings of the IMF and World Bank.)