World Bank chief Jim Yong Kim has called the reforms taken by Prime Minister Narendra Modi in India “significant”.
“The reform process has been significant. We think that certainly in the medium and long term, the growth will reflect the seriousness of Prime Minister Modi’s government in making those reforms,” Jim Yong Kim told reporters at the start of the annual meeting of the IMF the World Bank in Washington.
Kim was responding to a question on recent slowdown of the Indian economy. Both the World Bank and the IMF have downgraded India’s growth projections.
In its forecast, the World Bank has said that India’s GDP may slowdown from 8.6 per cent in 2015 to 7 per cent in 2017 because of disruptions from demonetisation and the implementation of the Goods and Services Tax.
The IMF has also lowered India’s growth projection to 6.7 per cent in 2017, 0.5 percentage points less than its previous two forecasts and slower than China’s 6.8 per cent.
“The goods and services tax would be very good for Indian growth, but for now the sense is that companies are waiting until that passes before really making investment and taking action. So, our sense is that this (slowdown in growth) is temporary,” said the World Bank President.
“Prime Minister Modi took a very different approach to our doing business report. And his approach was we are going to move up quickly and we are going to do the things that we need to do to reform the business environment,” he added.
The actions that Modi has taken are “really quite substantial”, Kim said.
(With inputs from agencies)