The Covid-19 pandemic calls for countries to focus on fiscal forbearance, although it will be a challenge for multilateral institutions to determine its norms, said N K Singh, the chairman of the 15th Finance Commission, in his address to the Commonwealth finance ministers’ meeting on Wednesday.
“In the context of the pandemic, we need to focus not on fiscal rectitude but on fiscal forbearance. Fiscal norms designed for normal times are not appropriate in distressed times like these,” Singh said.
He also outlined the need for setting up credible and independent fiscal institutions like the Fiscal Council and enforcement mechanisms for fiscal rules as integral aspects of these institutions.
Given the uncertain nature of the pandemic however, Singh said it will be a continuing challenge for finance ministers to determine the appropriate levels of fiscal stimulus.
Source : PTI