International Monetary Fund has said the ambitious Goods and Services Tax, GST to be implemented from July 1 would help raise India's medium-term growth to above eight per cent. It also said that reforms being done is expected to pay off in terms of higher growth in the future. <br/><br/>Deputy Managing Director of the IMF, Tao Zhang told PTI in an exclusive interview that Indian government has made significant progress on important economic reforms that will support strong and sustainable growth going forward. <br/><br/>He said GST will help raise India's medium-term growth to above 8 per cent, as it will enhance production and the movement of goods and services across Indian states. <br/><br/>Observing that India is the "fastest growing emerging market economy" Zhang said the IMF believes that India is going to continue to grow at a fast pace, with a projected 6.8 per cent rate for Financial Year 2016-17 and 7.2 per cent in 2017-18. <br/><br/>He said lower global oil prices have boosted economic activity, and helped lower inflation and fiscal and monetary policies have helped foster economic stability. <br/><br/>On demonetisation, Mr. Zhang said there are initial signs of recovery as the currency exchange has been progressing. However, he said a key concern for the IMF in India is the health of the banking system, which is still dealing with a large amount of bad loans, as well as heightened corporate vulnerabilities in several key sectors of the economy. He noted as India persists with its strong reform efforts, labour market reforms should take priority.