India needs fiscal-consolidation path to cut debt: IMF
India needs to consolidate its finances by curbing expenditure and boosting taxes to trim its debt, the International Monetary Fund said.
India needs to consolidate its finances by curbing expenditure and boosting taxes to trim its debt, the International Monetary Fund said.
India needs to consolidate its finances by curbing expenditure and boosting taxes to trim its debt, the International Monetary Fund said.
“A credible medium-term fiscal consolidation path driven by subsidy-spending rationalization and tax-base enhancing measures is needed to reduce debt, free up financial resources for private investment, and reduce the interest bill," the Washington-based fund said in a staff report following its latest regular review of the economy, known as an article IV consultation.
The IMF, which estimates India’s economy will expand 6.1% in the year through March, is set to reduce the prediction amid continuing weakness signaled by a decrease in rural consumption and lower business sentiment, Chief Economist Gita Gopinath said in an interview last week. The central bank recently cut its full-year GDP expansion forecast to 5% from 6.1%, after quarterly growth slowed to a six-year low.
Last month, Moody’s Investors Service reduced the nation’s credit-assessment outlook to negative, citing issues ranging from a worsening shadow banking crunch and a prolonged slowdown in the economy to rising public debt. The ratings company is projecting a budget deficit of 3.7% of GDP in the year through March, a breach of the government’s 3.3% target.
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