Lagarde: Fiscal consolidation, low inflation, reforms will add jobs in India

Surabhi Washington D.C. | Updated on January 08, 2018

Indian Finance Minister Arun Jaitley and International Monetary Fund (IMF) Managing Director Christine Lagarde attend IMFC plenary during the IMF/World Bank annual meetings in Washington, U.S., October 14, 2017. REUTERS/Yuri Gripas

IMF committed to quota reforms by 2019

The combination of fiscal consolidation, lower inflation and structural reforms will deliver more employment and jobs that cater to the aspirations of the Indian workforce, said Christine Lagarde, Managing Director, International Monetary Fund.

Her comments come at a time when employment continues to be a key challenge for the government.

On a solid growth track

Though the IMF has scaled down India’s GDP forecast to 6.7 per cent for 2017, Lagarde said that India is on a much more “solid growth track”.

“India is on a growth track which is much more solid in the medium and long term due to structural reforms undertaken by the government,” she told reporters after the meeting of the International Monetary and Financial Committee (IMFC).

The impact from demonetisation and the roll out of the goods and services tax, which has led to a slump in the Indian economy is “hardly surprising”, she said, while maintaining confidence in India’s growth prospects.

She however, stressed that countries including India must look at more measures to address economic concerns as the upswing in the global economy gives some respite.

“When the sun is shining, it is better to fix the roof. All 189 members of the IMF should go home and look at what part of the roof needs fixing,” she said as the annual meetings of the iMF and World Bank concluded.

Quota reforms

The IMFC has also reiterated its commitment to further quota reforms in the IMF that would give more say to developing and emerging economies. It has asked the Executive Board to complete the 15th General Quota Review by the Spring Meetings of 2019 and no later than the Annual Meetings of 2019.

“We are committed to concluding the 15th General Review of Quotas and agreeing on a new quota formula as a basis for a realignment of quota shares to result in increased shares for dynamic economies in line with their relative positions in the world economy and hence likely in the share of emerging market and developing countries as a whole, while protecting the voice and representation of the poorest members,” said the Communiqué of the 36th meeting of the IMFC.

Tax evasion

Lagarde also said that member countires of the IMF must work collectively to fight against tax evasion, money laundering and funding terrorism.

“All three need to be fought head on by the international community,” she stressed.

The journalist is in Washington D.C. as part of the IMF Journalism Fellowship 2017 to cover the Annual Meetings of the IMF and World Bank.

Published on October 15, 2017

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