International Monetary Fund¡¯s Chief Economist Gita Gopinath told NDTV that the organisation was ¡°a little less optimistic¡± about the Indian economy than it was a few months earlier.
Just last week, the IMF lowered India¡¯s projected growth in the current financial year to 6.1 per cent for this year but said that it would rebound to 7 per cent in the 2020-¡¯21 fiscal year.
India has been pushed to the seventh place in the global GDP rankings in 2018 with the UK and France forging ahead to the fifth and sixth spots, data compiled by the World Bank showed. In 2017, India had emerged as the sixth largest economy, while France was pushed to the seventh place in the global GDP league table.
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The monetary fund suggested subsidy-spending rationalisation, land reforms and tax-base enhancing measures.
"At times, government spends a lot but it is not well targeted. Subsidies used are not well targeted. You can improve not just the amount of spending but also its effectiveness," Gopinath told the news channel.
When asked if the rich should be taxed more, she said, ¡°"India should first think about the many other ways to reduce inequality through better education and health for people. More spending on these could help in reducing inequality."?
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She added that the corporate tax rate cut announced last week by finance minister Nirmala Sitharaman was a move in right direction.
In September, the Finance Minister announced tax cuts for corporates by 10-12 per cent to 25.17 per cent, a move that would cost the government Rs 1.45 lakh crore this fiscal year. The reduction in corporate taxes one among a range of announcements to push consumer demand and revive growth.