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New Delhi: International Monetary Fund (IMF), on Wednesday, applauded India for its large public investment in the Budget 2022. At the same time, it urged the country to expand the cash and kind transfers to the vulnerable owing to the global economic crisis due to the Russia Ukraine war. According to latest media reports, Paolo Mauro, Deputy Director, Fiscal Affairs Department of the IMF told reporters that the challenges coming from the economic consequences of Russia’s invasion of Ukraine were “quite severe”.
Observing that inflation in India is somewhat elevated, he said that it is a little bit above the comfort zone for the Central Bank, which is already addressing that issue. On the fiscal front, the budget is approximately neutral, which seems to be sensible at this time, he said in response to a question. “But given the rise in food prices, given the rise in energy prices, clearly this is a situation in which households are feeling the pain of the situation,” Mauro said.
He continued, “So, what we recommend here is to prioritise food security first and foremost, expand transfers to the vulnerable. India has an effective history of in kind transfers and also cash transfers to the population. We certainly would want that to continue and to be expanded.”
Beyond that, in the budget, one good part of that is that public investment is being prioritised, Mauro said.
He was quoted by PTI saying, “The country has major infrastructure needs, and we would certainly encourage that that investment on infrastructure be directed in some part to renewables because it is so important for India to transition away from coal and move toward more renewable sources of energy that creates jobs, and also reduces local pollution, which has so many adverse effects on health.”
(With inputs from PTI)
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