Mumbai: In yet another warning to Modi government which is still refusing to realise the grave situation, International Monetary Fund (IMF) on Tuesday blamed demonetization and implementation of Goods and Service Tax (GST) for the economic slowdown in the country.
The IMF also lowered India’s economic growth forecast by half a percentage point to 6.7% for 2017 against its April forecast of 7.2%.
In its latest World Economic Outlook, IMF said on Tuesday, “In India, growth momentum slowed, reflecting the lingering impact of the authorities’ currency exchange initiative as well as uncertainty related to the midyear introduction of the country-wide Goods and Services Tax”.
According to the World Economic Outlook, China will slightly outpace India, which was until now the world's fastest-growing major economy. The communist nation is expected to grow at 6.8% in 2017.
India’s GDP growth slumped to a three-year low of 5.7% in the June quarter, triggering downgrades in estimates for the full fiscal year. The World Bank expects the economy to slow to 7%, down from 7.2% estimated earlier.
Few days ago there was a political storm all across India when senior BJP leaders and former union ministers Yashwant Sinha and Arun Shorie openly slammed the government for its poor handling of the economy.
Both the leaders said the government missed an opportunity to perform and failed to take advantage of favourable environment, especially low oil prices.
The government however is still refusing to acknowledge its mistake with Prime Minister Modi himself repeating that the demonetisation and implementation of GST both are calculated and well thought moves taken in the best interest of the nation.