India has joined issue with the International Monetary Fund over the latter's "contradictory" assessment of the country's fiscal position and growth prospects.
In a meeting held early this week, India has asked the multilateral agency to rework its draft and come up with a "proper" assessment. The discussions in North Block were a part of the bi-annual Article IV consultations that IMF holds with its member countries.
While the IMF team reiterated the lower GDP growth rate projections of 4.5 per cent for India, the document also said that the overhang of debt can create fiscal stress a couple of years down the line.
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The comments by the IMF team related to both the extent of internal and external debts that the government has taken. As on March 31, 2001, the total external debt burden of the Centre was $100.4 billion as per the external debt statistics of the ministry of finance.
However, finance ministry officials have told the IMF that the analysis does not take into account the steps being taken by the government to improve its fiscal situation.
The officials have also said that the government has introduced a fiscal responsibility Bill in Parliament to ensure more fiscal discipline and transparency in the government's financial business. Besides, the Bill has a provision to phase out the RBI participation in the government's debt operations in next three years.
The finance ministry officials said IMF's insistence on fiscal management is not surprising, since last year also it had commented on the need for India to improve its fiscal discipline. But the officials said they want the IMF to recognise the positive steps that the country has taken since then.
The Article IV consultation is part of the agency's responsibility to undertake a comprehensive study of the fiscal position of the member countries.