Barring demonetisation, the NDA government has done a lot of good things on the reforms front – GST, bankruptcy reforms, improvements in the ease of doing business and direct benefit transfers – said Gita Gopinath, Professor of International Studies and Economies, Harvard University.

“I view GST very favourably because that is real reform. That is a way of formalising the economy. It is a very effective way of ensuring tax compliance, making it harder to earn black money.

“I mean nothing ever goes way completely, but it just makes it harder to make it happen,” said Gopinath, who is also the economic adviser to the Chief Minister of Kerala.

So, while the outcome of GST will be good, it is going to take a little while for it to smooth out.

“Implementation [of GST] has been a bit disruptive, which makes me wish they hadn’t done demonetisation because then they could have used that time to smooth it,” said Gopinath, who was in Mumbai to deliver Exim Bank’s 33rd commencement day lecture.

While she likes the idea very much of people moving away from cash, Gopinath observed that she has not come across a macroeconomist who thinks demonetisation was good idea.

“And it [demonetisation] is not something I think will be done anywhere else in the world for a country like India, the level of development that it has,” she explained.

On the impact of hike in interest rate by the US on India, Gopinath felt that as along as India keeps with its reform path and maintains fiscal discipline, the impact will be quiet small.

“And the reason I think so is that the normalisation is very slow and very gradual. The US has already started unwinding QE [quantitative easing] and that has gone very smoothly. There has been no reaction in the markets and no problem with capital flows coming into India,” she said.

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