Calling India a “bright” spot on the global economic horizon, IMF Managing Director Christine Lagarde told Prime Minister Narendra Modi that India would continue on the growth path that had recently picked up.
“India’s growth rate has crossed 7.5 percent, she (Lagarde) said, adding that it is the bright spot in the global economy. She expressed hope that India would continue on this growth path,” the Prime Minister’s Office said in a release here.
Lagarde said the country was bigger than what is perceived and must seize its moment, while lauding the abilities of Reserve Bank Governor Raghuram Rajan.
“Chak de India!” (Come on India), Lagarde earlier said in her speech at Lady Shriram College here, as she commenced her two-day visit to India, which will take her to Mumbai on Tuesday.
“India is the bright spot in the global economy at the moment,” she said, echoing Finance Minister Arun Jaitley’s budget speech last month when he said that at a time other economies were facing serious challenges, India was about to take off on a faster growth trajectory.
Regarding Rajan, who was a chief economist at IMF, and whom she is slated to meet in Mumbai on Tuesday, Lagarde said: “He’s not bad, he’s pretty good. I want to be very respectful of what Raghu (Raghuram Rajan) does.”
“While many countries in the world are grappling with low growth, India’s marching in the opposite direction,” Lagarde told the audience.
Her prescription for India — early implementation of a pan-India goods and services tax regime, reform of the subsidy regime, fiscal discipline and sound financial markets.
“Growth can’t be your only goal — welfare of people, specially those have traditionally not been included. That should be your objective — inclusiveness. That way you won’t have to face these cycles of ups and downs that have been troubling you.”
According to her, implementation of economic liberalisation programme was more important than bold reforms.
Yet, she felt, India today was in a position to face eventualities — like the one posed by possible hike in the US interest rates.
“India’s well-prepared. Fundamentally, you are strong.”
She is scheduled to attend a public event hosted by the Reserve Bank in Mumbai on Tuesday.
Speaking at one of the premier colleges for women here, Lagarde cited a forthcoming IMF working paper that shows India’s female labour force participation rate of 29 percent, that is far below that of its emerging market peers and has been declining since 2005.
Lauding Modi’s campaigns to educate girls and save girl children, Lagarde said: “My definition of inclusiveness includes women and includes everybody.”