More reforms, innovation to spur Indian growth: WB President ‘David Malpass’

As PM Modi works to lead on infrastructure & its financing, the World Bank Group looks forward to remaining a close partner with India for broad-based growth & shared, inclusive prosperity: World Bank President.

Attributing slowdown in the Indian economy to the global environment, World Bank President “David Malpass” on Oct 26 suggested that further reforms and innovation will help spur growth in the country. Innovation in the financial sector will be critical in achieving PM Narendra Modi’s goal of USD 5 trillion economy by 2024-25. However India has made progress in the financial sector, there is scope for further improvement in the banking sector, shadow banking and the capital market.

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Further, “Encourage progress in three primary areas. One is to allow the growth of the banking sector itself including the private sector. Second is deepening of corporate bond market and mortgage market and third is regulation of non-bank financial companies which have grown with the Indian financial system but entails some risks,” The WB President remarked.

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So, having very sound regulation of those will be helpful to the growth of the financial sector which is very vital for India’s growth. “PM Modi has a goal of USD 5 trillion dollar economy. It will be assisted by innovation in the financial sector”. On the economic slowdown, he added India has been affected by the global environment and slowed from fast growth in earlier years. Economic growth has hit a six-year low of 5% during the first quarter of the current fiscal.

“What my prescription or suggestions are that that openness to reform, innovation, improvement in government structure that allows for the faster growth. I think India has very good platform in doing that because of the experience India had with technology with knowledge as a broad concept within the society. They can help it move forward. It has made several important reforms in the last few years that can still pay off,” The WB President mentioned.

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Following the PTI news Agency, He Appreciated the Indian government move to cut the corporate tax rate, WB president argued it should add to more growth. The government last month slashed the corporate tax rate to 22% from 30% for domestic companies to push the sagging economy. He further remarked that the trade uncertainty is a drag on global growth along with other factors like Brexit, the frozen capital in bonds and the low investment rate in the world.

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“I think what is to be done is better growth programmes country by country. India has taken a good step on the corporate tax rate. That should add to more growth,”. Earlier in the day, the WB president delivered the keynote address on the role of the financial sector in development at the NITI Aayog fifth lecture series. The lecture was attended by the PM Narendra Modi along with ministers and senior government officials, The PTI news agency attributed.

Author: Trilok Singh, CEO here.

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