FM: Enough fiscal space to support war-hit sectors

ATTRIBUTES COMFORT TO RESULT OF DECADE-LONG PRUDENCE

- FE BUREAU

FINANCE MINISTER NIRMALA Sitharaman on Monday said the country has the fiscal space to support sectors impacted by the West Asia war, attributing the comfort to “decade-old fiscal prudence.”

The minister also described the evolving economic challenges arising from the escalating conflict as something “moving beyond a regional concern to a systemic risk.”

Speaking at an event organised by the National Institute of Public Finance and Policy (NIPFP) here, she said sound public finance management strengthens the counter-cyclical capacity of fiscal policy, enabling governments to “lean against the wind” during downturns. In contrast with India, several countries burdened with high debt and persistent deficits are now left with limited options, forced to choose between austerity and instability, she noted.

“On the contrary, India has fiscal space — room to maintain our capex programme, room for the RBI to cut rates, room to offer targeted support to affected sectors,” the minister said. “THIS IS THE dividend of a decade of fiscal discipline.