Ahead of India’s annual budget presentation next week, IMF’s Chief Economist Gita Gopinath has favoured the extension of the pandemic support measures

Ahead of India’s annual budget presentation next week, IMF’s Chief Economist Gita Gopinath has favoured the extension of the pandemic support measures, thrust on investment in infrastructure and expanding health sectors.

Indian government has provided a lot of schemes for small and medium enterprises, most of which is in the form of liquidity support, Gita told on Tuesday. “And you want to revisit it and see how effectively that is working and see whether additional support may need to be provided,” Gopinath said.

It would be a good time for banks and Non-Banking Financial Companies (NBFCs) to raise capital given the attractiveness of financing conditions at this point, she said. “We have to also keep in mind that as these pandemic measures are lifted, there would very likely be an increase in non-performing loans.

But there might also be a need for the capital support to be provided by the government for public sector enterprises.

That has been long on the table which is to improve governance of public sector banks, she said. Observing that there is a need for more public infrastructure spending, she said that the government has expressed an intention to do that.

There are needs to make more public investment. That would be another area that would require thrust,” she said, adding that health is another sector which needs renewed focus.

“In this pandemic, there has been spending but if you look at the health needs of the country, health capacity has to be increased.

We can also see an argument for expanding Ayushman Bharat programme for instance and also increasing the number of medical personnel,” Gopinath said.