IMF: Farm laws are significant step forward, but there are concerns

The International Monetary Fund has endorsed the Narendra Modi government's farm laws, stating that the new legislations have the potential to represent a significant step forward for agricultural reforms in India.

However, the IMF also cautioned the government would need to address the concern of those who would be adversely impacted during the transition to the new system.

During his media interaction, IMF Director of Communications Gerry Rice said, "The Indian government recently enacted three farm laws and the farmers are on the road protesting against it. The IMF believes that the farm bills do have the potential to represent a significant step forward for agricultural reforms in India."

Gerry further said, "The measures will enable farmers do directly contract with sellers, allow farmers to retain a greater share of the surplus by reducing the role of middlemen, enhance efficiency and support rural growth. We believe that they (farm laws) can represent a significant step forward. However, it is crucial that the social safety net adequately protects those who may be adversely impacted during the transition to this new system."

Asserting that the "growth benefits of these reforms will depend critically on the effectiveness and timing of their implementation", the IMF official said that "this may require further strengthening of the social safety net and ensuring that the job market can accommodate those that may be impacted by the reforms."

"So (India) need to pay attention to those issues as well," he said.