Focus on green investments after pandemic important for India: IMF
As the Indian economy recovers from the COVID-19 pandemic that has hit it hard, it is important for the country to focus on public investment, especially in green sectors, the International Monetary Fund said on Wednesday.
“As we move towards the recovery, it is also important to focus on public investment, especially green investment, so that the recovery can be inclusive and green,” said the deputy director of the Department of IMF public finances, Paolo Mauro, at a press conference here.
He said India’s debt is around 90% and it is important to point out that there is a medium term fiscal framework that assures investors that the debt ratio will decrease over the medium term.
Responding to a question, Mauro said the situation is improving regarding the outbreak.
It’s very different from a few months ago, he said, adding, thankfully, that the number of cases is declining and vaccination is becoming more widespread.
“From an economic point of view, therefore, even if the situation is improving, the priority remains to deal with the health emergency. Sufficient support remains to be provided, in particular to the poorest segments of the population through social protection, employment benefits, etc. Said Mauro.
“In terms of more recent reforms, one 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 held back credit for a long time, and it’s potentially very promising, he added.
“It is very important that the governance and independence of these so-called bad banks are in place so that the costs to public finances can be contained and that we can return to the promotion of inclusive growth”, Mauro said.