The IMF greeted India’s growth-focused Union budget on Thursday and said that fiscal policy can and should play an important role in promoting a solid and inclusive economic recovery. Gerry Rice, Director of Communications at the International Monetary Fund (IMF), said at a press conference here that the Union budget rightly focuses on health, education, public infrastructure. If completely enforced, it will help improve India’s growth potential.
We welcome the emphasis of the Indian Government’s budget on development. Fiscal policy can and should play an important role in promoting a solid and inclusive economic recovery, Rice said, referring to a query on the Union budget introduced to Parliament by Finance Minister Nirmala Sitharaman on 1st February. We also welcome steps to increase tax efficiency by introducing food subsidies in the budget. Of course, a medium-term plan for fiscal consolidation would be necessary to ensure legitimacy, he said.
“We also agree with the need to further boost the financial sector and look forward to the details of the proposed measures in this area,” Rice said. On Monday, Finance Minister Sitharaman announced a sharp rise in infrastructure expenditure, a doubling of healthcare spending, and an increase in the ceiling on foreign investment in insurance in her Budget for the next fiscal year to drag the Indian economy out of the pandemic-induced financial downturn.