1. IMF must be abolished, says demonetisation supporter Jagdish Bhagwati after India growth forecast cut

IMF must be abolished, says demonetisation supporter Jagdish Bhagwati after India growth forecast cut

Shortly after International Monetary Fund cut India’s FY18 economic growth estimate owing to demonetisation and GST, noted economist Jagdish Bhagwati rubbished the forecast saying that the institution must be abolished.

By: | Published: October 11, 2017 1:19 PM
Jagdish Bhagwati was in no mood to spare IMF for making terrible forecasts, and even lambasted the World Bank.

Shortly after International Monetary Fund cut India’s current fiscal 2017-18 economic growth estimate by as much as 50 basis points owing to demonetisation and GST, noted economist Jagdish Bhagwati rubbished the forecast saying that the institution must be abolished. “IMF should be abolished. They consistently make terrible forecasts,” Jagdish Bhagwati said in an interview to ET Now in New York.

Earlier yesterday, International Monetary Fund cut India’s FY18 economic growth forecast to 6.7%, even while boosting global growth outlook by 10 basis points. Further, IMF cut India’s growth forecast for the next year 2018-19 by 30 basis points to 7.4% due to the lingering effects of disruption caused by demonetisation and transition costs of GST. However, IMF also said that GST and other reforms could push India’s growth to above 8% in the medium term.

But Jagdish Bhagwati was in no mood to spare IMF, and even lambasted the World Bank. “I think the IMF, World Bank… we should get rid of these institutions from India. Why should we be going for… what are these institutions doing in India in the first place,” he said, adding that India is a very successful country, which doesn’t need “those guys coming in with very little knowledge”.

Jagdish Bhagwati, an open supporter of Narendra Modi’s decision of demonetisation, also once again lashed out at Nobel laureate economist Amartya Sen for reportedly questioning if the note ban move was democratic or not, FirstPost reported from New York. In a hard-hitting attack, Jagdish Bhagwati termed Amartya Sen as fool and said that he had rushed in and expressed his opinion without taking public view, FirstPost reported.

Jagdish Bhagwati reiterated his own support for demonetisation. “I was one of the people, and so was (Arvind) Panagariya, who said that actually, demonetisation might lead to an uplift of the economy, not a downturn,” he said, explaining that a lot of money which was just sitting in the shelves — black money — would come out. The inactive money, which was inactivated, would mean that the demand goes up in the economy, Jagdish Bhagwati added.

Regarding the instances of people converting their money with the help of others, Jagdish Bhagwati said that it was mostly expected. “You find some way… may be your servant or someone, you give them 30%, and he waits in the queue and converts it. So a lot of that we had expected,” he said.

Further, the economist also said that his own interaction with people had suggested that there was a widespread public support for the move. “I also thought there would be no repercussions as far as the Prime Minister was concerned, if it was negative. Because I had done my own gallup poll, which was really asking waiters and taxi drivers, and everyone was saying — he’s our Prime Minister,” he said.

  1. P
    PRAKASH BAJPAI
    Oct 11, 2017 at 5:21 pm
    Mr. Bhagwati should dhow some common sense. What is called black money was not sitting idle. It was part of no tax paying parallel cash economy. Like it or not this economy thrived on tax avoidance and very low administrative costs. This informal economy provided low cost input to formal economy. Demonetization killed it at a stroke.It is logistically not possible for informal economy to be part of formal economy overnight. Even if it tries it can not bear the economic costs. Without going into moral arguments - whole issue of informal sector job losses, low traction in economy etc was just waiting to happen. Arrival of GST with even higher administrative costs has finally killed it for good. Since it may take upto 5 years for formal sector growth to compensate informal sector, for at least 3-4 years we will see formal economy reporting growth which will not be seen on ground. Demonetization and GST are squarely to blame.
    Reply
    1. S
      Subrata Chakraborty
      Oct 11, 2017 at 2:42 pm
      The great economist Jagdish Bhagwati is asking for abolishing IMF and World Bank. A g statement. Let he come back to India and convince our Prime Minister to ask for the same. I am hopeful he will not withdraw this statement of him in later days. He will establish that really he is a great economist of the world today. However, if he succeeds, the entire nation will stand by him.
      Reply
      1. Nrasimha Prakash
        Oct 11, 2017 at 5:30 pm
        If you look at the history of the IBRD and IMF, these ins utions have served the interests of the developed countries most than the underdeveloped or developing countries. In the guise of advisory role for lending money to the developing economies, they influence the governmental policies which may not be in the long term interests of these countries. These ins utions were launched after the II WW with different objectives and now they are no more relevant and it is high time that they are abolished.
        Reply
      2. A
        ajit
        Oct 11, 2017 at 2:35 pm
        Loyalty triumphs over professionalism and common sense!
        Reply
        1. R
          rajesh
          Oct 11, 2017 at 4:29 pm
          SLAVERY makes people shy from questioning IMF just because they are phoren. lol
          Reply
        2. K
          Kabir
          Oct 11, 2017 at 2:15 pm
          First he should move and live in India permanently, otherwise he would look like a camel rider herding goats. :-)
          Reply

          Go to Top