World Bank CEO Kristalina Georgieva has said that the Centre’s decision to demonetise high-denomination currency will have a profound and positive impact on the Indian economy. In an interview to Hindustan Times on Wednesday, she said demonetisation may have caused some hardship to citizens, but the move will help promote a clean and digitised economy in the long run.
“What India has done will be studied [by other countries]. There hasn’t been such demonetisation in a country so big,” said Georgieva, who was on a two-day visit to India. “While demonetisation has, in the short term, created some impact on businesses dependent on cash, in the long term, the impact will be positive… The reforms India is targeting are profound.”
Moreover, the World Bank chief also believes that the transition towards digitisation, which includes the direct transfer of subsidies, will benefit the poor. She said, “India is the bright spot in today’s global economy and it is visible in the country’s performance... Our growth projection for India for this year is 7%. The signs are positive with the reform process underway and GST expected to be implemented soon,” Hindustan Times reported on Thursday.
On January 11, when the World Bank had slashed its forecast for India’s gross domestic product growth from 7.6% to 7% in the financial year ending March 2017, the international agency had said had said in its report that demonetisation contributed to slowing growth in 2016. It had argued that the currency ban would continue to affect business and household economic activities in the short term, because cash still accounted for more than 80% of money transactions in India.
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