India need to focus on medium-term fiscal consolidation

India need to focus on medium-term fiscal consolidation

The International Monetary Fund (IMF) on Thursday said that India urgently needs more ambitious structural and financial sector reform measures and a medium-term fiscal consolidation strategy due to the rising debt levels.


“The Indian budget, I can say that we think that, given the weaker economic environment in India, which, again, we’ve talked about recently - the environment is weaker than we had forecast earlier - that a more accommodative fiscal stance, this year is appropriate, so that more accommodative fiscal stance in the budget, we think, is appropriate. That said, while the budget touches on ongoing sectoral efforts, there remains an urgent need for more ambitious structural and financial sector reform measures and a medium-term fiscal consolidation strategy, anchored intangible revenue and expenditure measures, especially given rising debt levels. So, again, we think the more accumulative fiscal stance in the budget is appropriate, but, over the medium term, to be looking at a fiscal consolidation strategy,” IMF spokesperson Gerry Rice said.

The IMF sharply cut its growth estimate for the current fiscal year for India to 4.8% last month from the 7.5% made in January last year.




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