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The International Monetary Fund (IMF) says that the recent Indian budget's "accommodative fiscal stance" is appropriate in the weaker economic scenario, but wants New Delhi to focus in the medium term on fiscal consolidation because of the growing debt levels.
Since India's economic environment is weaker than what the IMF had forecast earlier, a "more accommodative fiscal stance in the budget we think is appropriate," Communications Director Gerry Rice said on Thursday at a news conference in Washington.
But, he also 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 consolidations strategy anchored in tangible revenue and expenditure measures especially given rising debt levels".
The IMF sharply cut its growth estimate for the current fiscal year for India to 4.8 per cent last month from the 7.5 per cent made in January last year.
(Arul Louis can be contacted at firstname.lastname@example.org and followed on Twitter @arulouis)