Demonetisation Has Been Remedied 75 Percent, Says IMF Chief Christine Lagarde

| October 15 , 2017 , 10:50 IST

The announcement of demonetisation in November 2016 and the subsequent implementation of the Goods and Services Tax (GST) in July 2017 dealt a double blow to the economy, reducing the growth rate for the first time in years.

Almost a year after the demonetisation, International Monetary Fund (IMF) Christine Lagarde said that the demonetisation has now been remedied by 75 percent.

“We have slightly revised down our Indian projection as a result of demonetisation that has been announced recently a little bit unexpectedly. Our understanding is that demonetisation has now remedied about 75 percent. Those are the latest figures that we have,” she said.

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Lagarde added that the situation in India after demonetisation has “improved significantly”.

The IMF chief hailed other reforms taken by India, including the GST and the bankruptcy reform.

“The GST reform is really an act of courage. It really means reforming in-depth in each of the Indian States in order to substitute the State taxes with overall federal tax, the re-allocation of it and the digital platform that supports it", Lagarde said.

“So, I am personally impressed by the work that is being done in that regard and expect some positive outcome,” she said.

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“There has been other reforms as well that has been conducted by the Indian authorities courageously. One of them -– as a former lawyer I am particularly attentive to because it particularly when you have to deal with the corporate sector banking sector that means help — is the bankruptcy reform,” Lagarde added.

“We are seeing significant development and clear determination to continue and sustain growth going forward,” she continued.

 “So clearly the situation is now being mended. And we believe that India is going to continue to grow at a really fast pace. I think, we have 7.2 percent forecast for 2017,” Lagarde said.

Lagarde spoke at annual IMF and World Bank meeting taking place in New York.