STORY: India aims to sync its fiscal consolidation path with the target date for debt-to-GDP ratio, said a top Indian economic bureaucrat on Monday (February 13).
A committee to review India’s key fiscal deficit law, Fiscal Responsibility and Budget Management (FRBM) Act, submitted its report to Finance Minister Arun Jaitley on January 23, recommending cutting the debt-to-GDP ratio to 60 percent by 2023 from 68.5 percent in 2016.
“We have sort of calibrated our fiscal consolidation path in a manner that our target date for achieving a certain level of debt to GDP is maintained and within that, we are trying to do a marginal kind of adjustment with regard to our fiscal deficit,” said Economic Affairs Secretary, Shaktikanta Das.
Das was speaking at the inauguration of International Monetary Fund’s (IMF) South Asia Regional Training and Technical Assistance Center (SARTTAC) in New Delhi.
The IMF last month trimmed India’s growth outlook for the fiscal year beginning in April to 7.2 percent from 7.6 percent previously, citing the blow of demonetisation to the cash-reliant economy.
At a stroke, Prime Minister Narendra Modi scrapped money worth 15.4 trillion rupees ($220 billion), equal to 86 percent of cash in circulation leaving businesses, farmers and households all suffering.
IMF Deputy Managing Director, Carla Grasso, said SARTTAC will help strengthen the implementation of macroeconomic and fiscal policies in the member countries.
“The center, strategic goal is to help its member countries strengthen their institutional and human capacity, to design and implement macroeconomic and fiscal policies that promote inclusive growth and reduce poverty. SARTTAC will allow the IMF to meet more of the high demand for technical assistance and training from the region,” said Grasso.
According to a government release, SARTTAC is expected to become the focal point for planning, coordinating, and implementing the IMF’s capacity development activities in South Asia.
The pact to set up the regional training centre was signed in March last year.