World Bank President Jim Yong Kim said that the recent slowdown in India’s economic growth is an aberration caused by temporary disruptions in preparation for the Goods and Service Tax (GST).
He asserted that it will get corrected in the near future.
Kim while responding to questions on the slowdown in India’s growth in the first quarter said that GST is going to have a positive impact on the Indian economy.
“There has been a deceleration in the first quarter, but we think that is mostly due to temporary disruptions in preparation for the GST, which by the way is going to have a huge positive impact on the economy,” Kim said.
“We think that the recent slowdown is an aberration which will correct in the coming months, and the GDP growth will stabilise during the year. We have been watching carefully, as Prime Minister Narendra Modi has really worked on improving the business environment, and so, we think all of those efforts will pay off as well,” he added.
Further responding on India and human capital, Kim praised the commitment of Prime Minister Narendra Modi to sanitation issues, and said “Swachh Bharat” is one of the most effective programmes anywhere.
“I know that Prime Minister Modi himself personally is very committed to improving opportunities for all of India. But, India has a lot of challenges. We look at some of the educational outcomes, we have looked at some of the health outcomes, and India has room to improve, like most other countries,” he said.
“Our job is to take the political will and commitment that Prime Minister Modi has clearly demonstrated and has communicated to everyone, and then bring to India the most effective intervention that will, as quickly as possible, improve the stock of human capital,” Kim said.
Finance Minister Arun Jaitley would be leading a delegation to the annual meeting next week.
India’s GDP grew 5.7 percent during the April-June period. During the previous quarter (January-March) the GDP had grown by 6.1 percent.
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