The International Monetary Fund (IMF) wants the central government in India to be more "transparent" on its data on fiscal numbers as it is a "laggard" in this area when compared to other member countries in the G20, news agency PTI has reported.
There needs to be a "credible fiscal consolidation" and a more ambitious one since the government has missed its budgeted fiscal targets in the past few years, the report said quoting a senior IMF official.
This is further needed because the government has not provided any information as to how it is going to make up the difference of Rs 1.45 lakh crore given in the form of cuts in corporate taxes.
The comments come amid allegations of the budget math not adding up with some pointing to a Rs 1.7 lakh crore hole in the estimates, and also over 100 economists questioning the official data computation.
"Fiscal transparency should be increased. It is fairly difficult for the private sector to get the full picture on fiscal standing. India is somewhat lacking in a programme on G20 data initiative on fiscal transparency where comparative countries have all made greater progress," the report said quoting IMF's deputy director Anne-Mary Gulde.
She welcomed the cuts in corporate tax to bring it at par with other competitive economies but said that very less has been done to compensate for the impact on the revenues coming from them.
"We feel that the revenue impact needs to be considered going forward and compensated for...we would urge that fiscal policy be formulated against more realistic background to give a more clear direction to private sector expectations," the report said quoting Gulde.
She advocated on using the tools in monetary policies to recover the growth in the economy and called for urgent measures of reforms in labour, land and factor markets to revive and sustain the growth. The official also stressed on the mergers of public sector banks and said that it should be done "cautiously" and advised for relooking at both the governance and efficiency of capital allocation at these government-run banks.