IMF Advised India to Simplify GST Structure and Cut Debts


IMF on its annual country report said the government’s decision to ensure a 50% premium over cost of farm production “could skew farmers’ production decisions, add to inflation, and enlarge the fiscal burden”. India today stands on a economy of $2.6 trillion and will remain one of the worlds’ fastest growing economies, aided by structural reforms, as said by IMF. IMF (International Monetary Fund) also advised India to simplify its GST (Goods and Service Tax) structure and reduce its debts.
IMF released its annual country report every year in which its advice varies countries economic system to do well and take necessary steps to maintain its growth rate and GDP. In its annual country report 2018, the IMF said the government’s decision to ensure a 50 percent premium over cost of farm production “could skew farmers’ production decisions, add to inflation and enlarge the fiscal burden”, so “their use (backed by assured procurement) should only be temporary and limited to correcting market failures”. It is simply reflected on the annual country report by IMF that the IMF is both worried and cautioned about the Indian economic structure.
As Indian economy is growing rapidly the GDP per capita in also increasing but the real tension for India is its growing debt with in. IMF cautioned that India‘s debt (at 70.4 % of the GDP in Financial Year 2018) is “close to the thresholds that raise the likelihood of debt distress among emerging market economics”. So, a more ambitious medium term fiscal consolidation path is required that is consistent with the FRBM review committee’s target of trimming the government debt to 60 % of the GDP by Financial year 2023. As per the Sources the Indian Government is trying to achieve the targets by the year 2025.
It is simply clear that India with its growing economy will soon be taken over the economic lime light of the world. Now only the time will tell how long it will take. If India implicate the IMF’s advice to reduce the debt burden and implement more easier GST slap then the process for India to dominate the world economic market will be more smoother.

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