IMF welcomes India's focus on growth in Union Budget

The IMF on Thursday welcomed India's Union Budget for focussing on growth and said fiscal policy can and should play an important role in facilitating a strong and inclusive economic recovery.

Gerry Rice, Director of Communications at the International Monetary Fund (IMF), at a press conference said the Union Budget rightly focuses on health, education, public infrastructure and, if fully implemented, can help increase India's growth potential.

We welcome the Indian government budget's focus on growth. Fiscal policy can and should play an important role in facilitating a strong and inclusive economic recovery, Rice said, responding to a question on the Union Budget presented by finance minister Nirmala Sitharaman in Parliament on February 1.

We also welcome measures to improve fiscal transparency by including food subsidies in the budget. Of course, a medium-term fiscal consolidation strategy will be important to ensure credibility, he said.

And we also agree with the need to further strengthen the financial sector and look forward to the details of the proposed measures in that area, Rice said.

Finance minister Sitharaman on Monday proposed a sharp increase in expenditure on infrastructure, doubling of healthcare spending and raising the cap on foreign investment in insurance in her Budget for the next fiscal in a bid to pull Indian's economy out of the pandemic-induced economic crisis.