Economic Survey 2023: "Modest" Increase in Government Debt as a Percentage of GDP
Economic Survey 2023 said that compared to its peers, India's debt-to-GDP ratio showed a little increase. While other nations' debt-to-GDP ratios have climbed significantly over the last 15 years, the Union government's has only slightly increased. According to the assessment, India's public debt profile is comparatively steady and characterized by minimal currency and interest rate risks.
95.1 percent of the Union Government's total net liabilities at the end of March 2021 were in local currency, compared to 4.9 percent of sovereign foreign debt, indicating little currency risk. Additionally, the Economic Survey said that since sovereign foreign debt is solely derived from official sources, it is protected from the turbulence of global financial markets.
Between 2005 and 2021, the overall government debt to GDP ratio significantly changed across all nations. This rise in GDP for India from 81 percent in 2005 to around 84 percent in 2021 is rather moderate. , to thee to of the of the ae of of, and more specifically, the a Rusor, s in. We are awesower an illy of illys and of e of the
In 2022, according to the IMF, the worldwide government debt will be 91% of GDP, up 7.5% points from pre-pandemic levels. In light of this global context, the overall liabilities of the Union Government decreased from approximately 59.2% of GDP in FY21 to 56.7% in FY22.
According to the report, floating internal debt would only account for 1.7% of GDP by the end of March 2021, with fixed interest rates making up the majority of public debt contracts in India. As a result, the debt portfolio is protected against interest rate volatility.
"At the conclusion of the pandemic year FY21, the general government debt to GDP ratio climbed from 75.7% at the end of March 2020 to 89.6%. It is predicted to fall to 84.5% of GDP by the end of March 2022. India will be able to maintain a positive growth-interest rate difference because to the focus on capex-led growth. The Economic Survey said that the debt levels remain manageable while there is a favorable growth-interest rate difference.