The International Monetary Fund (IMF) on Thursday welcomed the passage of the Goods and Services Tax (GST) bill in the Lok Sabha, saying it will lead to long-term sustainable growth in the country.
"We welcome the introduction of GST and one of the fiscal reforms and it is one of the key elements for the long-term sustainable growth in India," IMF's director for Asia and Pacific Department Changyong Rhee said at a press conference here to present IMF's Regional Economic Outlook for Asia and Pacific.
"It would be one of the most important agenda of the Modi government. So far international society has a high expectation of Modi government implementing reforms," he added.
In this connection, Rhee said that the IMF had already taken GST roll-out into account in its projections for India.
"We have already counted on the implementation of the GST in the 2016 GDP forecast (of 7.5 percent)," he said.
The main purpose of the GST bill is for a unified regime that will subsume most indirect taxes levied by the central and state governments such as excise duty, service tax, value added tax, sales tax and octroi to facilitate a common market across the country.
According to the IMF's Regional Economic Outlook for Asia and the Pacific, India's growth rate is expected to rise to 7.5 percent this year and next, making it one of the fastest growing economies in the world.
Making a contrast in Asia, China's economy is slowing to a more sustainable pace -- 6.8 percent GDP growth in 2015, and 6.3 percent in 2016.
Rhee said that one good news for Asia was that India is picking up though China's growth is moderating while Japan is recovering.
