Former IMF Deputy MD John Lipsky calls for accelerated reforms

MUMBAI: With reforms in place, increasing productivity and implement reforms would be a key challenge for India to remain on a strong growth trajectory, according to a former top IMF official.

Lauding India’s reforms initiative former acting MD of the IMF warned that India would need to work on improving productivity. "The key challenge for India, however, will be to boost productivity significantly, and on a sustained basis" said John Lipsky, former acting managing director of International Monetary Fund, in India to deliver Exim Bank’s commencement day lecture.

"The budget points to increased public investment, tax reforms, and measures to improve business environment, including an improved Bankruptcy Code, improved targeting subsidies, and more decentralised governmental decision-making." He added.

Lispky, who is now a senior Senior Fellow at the Paul H Nitze School of Advanced International Studies, Johns Hopkins University, said the main challenge isn’t so much in conceiving what to do, but in gathering popular support for change, and in effective implementation. "And, that is always the most difficult part of reform."

There are many favourable global developments which are favourable for India which may not last and hence should make the best of the situation, Lipsky added.

He highlighted the the favourable combination of low advanced economy inflation and low interest rates, lower energy prices and commodity prices as well as favourable investor expectations.