Finance secretary Garg leads India team to WB-IMF spring meetings

Washington:Economic affairs secretary Subhash Garg is leading the Indian delegation to the World Bank-International Monetary Fund spring meetings beginning amid fears of a trade war between the United States and China, the world’s two largest economies.

Garg, as economic affairs secretary, is the “alternate governor” for India on the IMF’s board of governors, and heads the team in the absence of the designated governor, finance minister Arun Jaitley, who is undergoing treatment for a kidney ailment.

Every IMF member country has a governor and alternate governor on the IMF’s board of governors, which is its highest decision-making body.

IMF managing director Christine Lagarde set up these spring meetings in a speech in Hong Kong last week in which she warned that though the state of the current global economy was “bright”, “we can see dark clouds looming” and that the world is in “danger of being torn apart”.

Her remarks came after US President Donald Trump threatened to impose tariffs on goods worth $150 billion from China, which has threatened to retaliate with higher duties on American imports. The two sides have only announced their intention to impose higher tariffs, and not done so yet.

The IMF will on Tuesday release its report on the state of the world’s economy, called the World Economic Outlook, which will include an update and projections on India’s economy.

The World Bank has weighed in, saying in a report released on Sunday that India had overcome the adverse impact of demonetisation and the Goods and Services Tax — both disruptive but necessary measures — and was bouncing back. It has projected India will grow by 7.3% in 2018 and 7.5% in 2019, up from 6.7% in 2017.

The bank also said the Indian recovery will make South Asia the world’s fastest growing region.

There might be more good news in store for India this week.

The Indian delegation, which will include RBI governor Urjit Patel and Chief Economic Adviser Arvind Subramanian, will attend meetings of the board and the usual side meetings, and events that take place around the spring meetings, such as the G-20. But because of Jaitley’s absence, a lot of political level meetings, such as those with counterparts from other countries such as the US, will not take place.

IMF sources have said they had planned speaking events for Jaitley, which they dropped because of his plans not to visit.