INSUBCONTINENT EXCLUSIVE:
The International Monetary Fund on Friday supported India's recent decision to reduce corporate income tax, saying it has a positive
It, however, said India should address continued fiscal consolidation and secure long-term stability of the fiscal conditions."We believe
India still has limited fiscal space so they have to be careful
We support their corporate income tax cut because it has a positive impact on investment," Changyong Rhee, Director, Asia and Pacific
Department, IMF, told reporters at a news conference here.Following a marked slowdown in the last two quarters in India, the economy is
expected to grow at 6.1 per cent this fiscal year, picking up to 7.0 per cent in 2020, he said."The monetary policy stimulus and the
announced corporate income tax cut are expected to help revive investment," said the top IMF official
Anne-Marie Gulde-Wolf, Deputy Director, Asia and Pacific Department, IMF, said India should address the non-bank financial sector
issues."While there have been improvements that have been put in motion, including efforts to recapitalise the state banks, the issue of
non-bank financial institution remains partly unresolved and regulatory equity is one of the issues that needs to be achieved," she said.The
government is aware of it, she added
So there are issues working at that and this is something that is why not yet fully achieved, but is entrained
While there are problems at this stage, increased attention to lending practices of non-bank financial institutions continue to be very
important," Gulde-Wolf said.Responding to a question, she said India overall has a fairly high level of debt and fiscal consolidation needs
"However, implementing fiscal consolidation in the context of a federal system is much more complicated
The level of fiscal structural issues and challenges are different in different states," she said.So one of the ways in which the IMF is
engaged in this question is it has a regional training institute that has started working with the individual states on strengthening fiscal
management at the state level, Gulde-Wolf said.In the context of surveillance engagement with India, she said, the IMF is increasingly
placing emphasis on the need to better coordinate the fiscal state level activities and fiscal activities
"But it is a concern that the authorities are taking serious and are working at," Gulde-Wolf said.Follow TheIndianSubcontinent for latest
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