Budget 2022-23 lays forth a sensible policy programme for India, according to IMF Managing Director Christine Lagarde

Finance Minister Nirmala Sitharaman's latest Union budget represents a "thoughtful policy programme" for India, according to International Monetary Fund Managing Director Kristalina Georgieva.

"We've forecasted India's growth to be fairly strong. Yes, we've reduced our 2022 expectation from 9.5 percent to 9 percent from our earlier estimate. "But we also have a slight upgrade for 2023," Georgieva said during a virtual round table with a group of reporters, "because we feel we will see a stable growth not dissimilar to (those projected by) the (Union) Minister of Finance."

She noted that the International Monetary Fund (IMF) sees this as contingent on a number of factors, including that they continue to function better in the COVID-19 pandemic and should the pandemic persist, and that tightening financial conditions would be done with clear forward guidance and in a prudent manner, not causing any additional significant shock.

"So far, the tightening of financial conditions does not appear to be posing a significant challenge for developing markets." The influence on rates is insignificant when compared to past periods. Why? Because emerging markets have worked to establish buffers and robustness in anticipation of crises like this, and because many of them have taken smart measures when faced with inflationary pressures," she said.

"We are very optimistic about the fact that India is considering not only short-term issues, but also long-term structural transformation, and that there is a strong focus on innovation, research and development, human capital investment, and digitalization, as well as thinking about how India can accelerate the climate change agenda using economic instruments," Georgieva said.

In answer to a question, the senior official said, "Overall, I read the (budget) statement and I felt it was a really thoughtful policy programme for India."