On Wednesday, the International Monetary Fund said that as the Indian economy improves from the COVID-19 pandemic that devastated every aspect, it is crucial for the nation to concentrate on public investment, especially in green areas.
“As we move towards the recovery, it is also important to focus on public investment, particularly on green investment, so that the recovery can be inclusive and green,” IMF’s Fiscal Affairs Department Deputy Director Paolo Mauro told reporters during a news conference.
He stated India’s debt is at the ratio of about 90 per cent. It is essential to signal a medium-term fiscal structure that guarantees investors that the debt ratio will decrease during the medium term.
Replying to a question, Mauro said the condition is progressing in terms of the epidemic.
It is very distinct from a few months ago, he said, continuing fortuitously, the number of infection cases is decreasing, and vaccination is growing more widespread.
“On the economic front, therefore, even though the situation is improving, the priority remains to address the health emergency. It remains to provide ample support, particularly to the poorer segments of the population through social protection, employment benefits, and so on,” Mauro said.
“In terms of more recent reforms, one that I would like to highlight is the National Asset Reconstruction Company, the so-called bad bank. This is potentially very promising because it is important to tackle non-performing loans,” he said.
This has been a long-standing drag on credit, and probably this is very promising, he continued. Mauro said It is essential that both the governance and the independence of such so-called bad banks be in place so that the costs to public finances can be placed under control and one can go back to encouraging inclusive growth.