ECONOMY
India ready to explore ways to collaborate more with IMF, notes Sitharaman
- IBJ Bureau
- Aug 18, 2024
India was open to “exploring more ways” to increase its collaboration with the International Monetary Fund (IMF), Finance Minister Nirmala Sitharaman said during a meeting with the IMF’s First Deputy Managing Director Gita Gopinath on Saturday.
During the meeting, Ms Gopinath congratulated Ms Sitharaman on policy continuity on the fiscal consolidation path and appreciated the strength of India’s relationship with the IMF, which, she said, was “valuable to both India, IMF and to the world at large”.
Speaking at an event at the Delhi School of Economics, Ms Gopinath mentioned that the multilateral agency was now addressing “newer forms of crises” across the world. She said that the IMF was providing long-term financial support to low-income countries to help them tackle climate change, reduce poverty and restructure debt. And for that purpose, India, China, Saudi Arabia were among some countries that were providing financial support, which was not the case earlier.
On the country’s fiscal consolidation roadmap, Ms Gopinath said that the right approach for that would be to increase revenues and not necessarily reduce overall spending. However, she mentioned the need to provide targeted fertiliser subsidy as it had a high outlay.
On taxes, she mentioned that revenue as a percentage of GDP could be increased by broadening the tax base, both on personal Income Tax and GST. “If you simplify the GST rates and broaden the base, you can raise 1 per cent of revenue as a percentage of GDP,” she said, adding that exemptions given in personal Income Tax should be cut down further.
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