Due to the structural economic reforms which were carried out in the last few years, India’s economic growth has slowed down, report released by the US administration. India along with Brazil has been far less open in carrying out trade, report said.
Due to the structural economic reforms which were carried out in the last few years, India’s economic growth has slowed down, PTI cited a report released by the US administration. India along with Brazil has been far less open in carrying out trade, Economic Report of the President (ERP) alleged. In comparison to the previous year, America’s trade with India has narrowed in the beginning three quarters of 2017, the PTI cited same report.
Demonetisation that was implemented in November 2016 is one of those economic reforms which hampered the growth as due to this 86 percent of cash in system was invalidated overnight. The Indian economy has 90 percent cash-based transactions.
Goods and services tax (GST) was introduced in July 2017 which led to scrapping of various sales taxes applied all across the country. The report by US administration says that the implementation of the GST also slowed down India’s economic growth rate. However, as its effect stabilises, economy may reap rich dividends in the long run.
The US report also named mounting share of non-performing loans (NPLs) in the banks as a reason of concern. As per IMF data, the NPL slippage stood at 9.7 percent in Q3 of 2017 in comparison to 1.7 per cent in China. However, the report is also hopeful of the fact that India’s banking woes will end given the announcement of Rs 2.11 trillion bank recapitalisation programme. Under the program, the Finance Ministry will infused cash in the public sector banks as per their immediate requirements and clean their account books. The government expects this step will also help in reviving the its economy. India didn’t implement the World Trade Organisation (WTO) ruling on poultry, the Donald Trump administration said. The case related to poultry imports is still being contested at the WTO. Various agricultural products such as poultry meat, eggs, and live pigs, from the US have been restricted by India to stop avian influenza from entering India, the report added.