While the opposition party has been putting allegations on the financial schemes of the government, especially GST, the World Bank has a different viewpoint. Jim Yong Kim, the President of the World Bank, has said that the initial slowdown in the Indian economy, seen immediately after the implementation of the Goods and Services Tax, is temporary and the economy will certainly grow due to its effectiveness in the future.
Goods and Services Tax and its implementation in India has been debated, not only by prominent economists of India but by financial gurus all over the world. With the declining GDP, it was projected that the new taxation regime and its implementation was a hasty decision by the government. On the other hand, the government was seen trying to convince the common masses repeatedly about the long-term positive effects of GST.
Amid such heated discussions, the statement of the World Bank President has brought some sense of confidence to the people and the economists alike. He called the current financial situation as a deviation from the usual which is temporary and will get corrected in the near future when the GDP growth will eventually stabilize.
At a conference call before the annual meeting of the International Monetary Fund and World Bank being held in Washington, Jim Yong Kim also praised the efforts of PM Narendra Modi in the areas of sanitation and hygiene, stating that the Swachh Bharat Abhiyan has become one of the most effective programmes of the world. In the talk on the call with news agencies, he said that the efforts put in by the Prime Minister in order to create an environment, capable of establishing and promoting business and entrepreneurship will also pay up pretty soon, thereby negating all the current allegations of slow growth and faulty implementation of the GST.
In a recent statistical revelation, the World Bank stated that India has slipped to its lowest point in three years, bringing down South Asia to the 3rd position in economic growth from the 1st position which it had been maintaining for two years. The World Bank has therefore reduced the GDP forecast for India from 7.2% to 7%. The international financial organization saw demonetization and the implementation of the Goods and Services Tax as the two major reasons for the economic slowdown.
Though the World Bank has lowered the predicted growth rate, yet it believes that India will certainly come back to its original growth regime in 2019-2020 by obtaining a GDP rate of 7.4%. This is a good news for the Indian market as well as the economy in the light of the present slowdown.
It will be interesting to note the effects of Make in India and entrepreneurship encouragement by the government on the growth rates, along with the contradictory role played by GST. The predictions for GDP rates by the World Bank will also have an effect on the Indian market, thereby leading to slight changes in the same in the future as well.