Austerity Upon Austerity Doesn't Work: Lagarde

Christine Lagarde, IMF Managing Director
Paul J. Richards | AFP | Getty Images
Christine Lagarde, IMF Managing Director

I caught up with two leading ladies this weekend at the Annual IMF meeting in Tokyo. Each navigating different economic landscapes with different solutions.

IMF managing director Christine Lagarde, who is knee deep in the world's austerity and hopefully growth plans, and India's ICICI bank CEO Chanda Kochhar who is enjoying 20-plus percent growth as that country's second largest bank.

Lagarde finds herself at the nucleus of the globe, managing expectations for the troubled euro zone as well as the slowdown elsewhere in the world, most notably China. She seemed to back away from the harsh realities of "austerity all the time" in troubled Greece.

In fact, I noticed a difference in her demeanor toward Greece. She also said austerity on top of austerity doesn't work, and "the key is to get the country back on track."

"If we put upon them obligations that they simply cannot deliver on, because it's just too hard and too much -- the program is not going to be credible. So, our position is that we would rather have a program that is difficult but credible rather than a program that is going to be so difficult that it is not credible. It takes time," she said.

(Read More: Euro Divides, 'Violent Revolution' May Loom — Critic)

Whether that means she will agree, along with the European Central Bank (ECB) and the European Commission (EC) to provide the next tranche of money to Greece in the next few weeks remains to be seen. Greece has said the coffers will go dry by the end of November as the country will run out of money.

(Read More: Merkel Offers Words of Support as Greek Debt Worsens)

She said it's a process and the troika is watching the structural reforms that have occurred. I actually cannot imagine Greece staying in the euro zone but she would not comment on that. Lagarde told me that while the ECB has done a good job in stabilizing the euro zone's problems, it is fiscal policy and structural reform now that must coincide with monetary policy reforms such as tax reforms and growth policies.

While she would not address her own country France's recent moves to tax the highest earners at a staggering 75 percent tax rate, she did say typically what works to goose economic growth is spending cuts combined with tax changes such as broadening the tax base while lowering tax rates, not increasing taxes as severely as France has.

She was quick to remind me that while the IMF has cut economic growth expectations, the global economy is still growing some 3 percent and that Asia is increasingly critical to that growth.

India Surprises

While China has slowed down from its peak growth levels, it has been India that has surprised some on the upside due to very vibrant domestic demand.

In fact, Chanda Kochhar, recognized as one of the most powerful women in the world as CEO of ICICI, was very vibrant and optimistic. She told me new policies by the government of India announced in the last 4 weeks will go a long way in increasing foreign investment and spiking domestic demand. She said she expects ICICI to grow 22-24 percent next year and is seeing growth in all sorts of loans from mortgages to auto loans and trade.

She says her bank boasts 13 percent tier one capital, ensuring no capital needs and said a steady increase in population growth should continue to boost domestic demand. She expects some 11-12 million people to join the workforce every year, which has been the case now for several years.

(Read More: India Declares We're Back in Business)

She expects those people to earn more, spend more and want to live a better life. She is hoping ICICI can help them do just that.

Both women told me one way to see Asia keep its vibrant growth going is to encourage more women to participate in the workforce. A view of two corners of the world from two different powerful women.

-By CNBC's Maria Bartiromo