India’s general Government debt-to-GDP ratio may peak to 89% in FY23: World Bank

| | New Delhi
  • 0

India’s general Government debt-to-GDP ratio may peak to 89% in FY23: World Bank

Thursday, 20 August 2020 | IANS | New Delhi

India’s general Government debt-to-GDP ratio is set to surge, with a World Bank report projecting the ratio at rising to its peak of 89 per cent in the financial year 2022-23, before gradually declining.

The report titled ‘India Development Update’ for July 2020, noted that with the revenue outlook seriously dented, and new expenditure imperatives, the fiscal deficit and debt of the central and state governments are likely to increase sharply over the next two years.

“India’s debt-to-GDP ratio is projected to increase significantly in the short term, reflecting the expected contraction in GDP growth and increase in the primary deficit. While there is a significant level of uncertainty around the projections, the general government debt-to-GDP ratio is projected to peak at around 89 per cent in FY22/23 before gradually declining thereafter,” it said.

General government debt refers to the overall liabilities of both the Union Government and states.It, however, noted that the country’s public debt is expected to remain sustainable because it is mostly denominated in domestic currency, of long or medium-term maturity, and is predominantly held by residents.In a baseline scenario, which takes into account revised growth projections, lower-than-expected divestment proceeds, and new expenditure commitments, the fiscal deficit of the central government is projected to increase to 6.6 per cent of GDP in FY 2020-21 and remain at a high of 5.5 per cent in the following year.

“Assuming that, the states’ deficit is contained within 3.5-4.5 per cent of GDP, the deficit of the general government may rise to around 11 per cent in FY 2020-21,” it said. Further, the report also said that the World Bank may project a steeper contraction of the Indian economy for the current financial year, revised from the previous estimate of 3.2 per cent.

State Editions

Tourist spots in State to reopen from October 1

28 September 2020 | PNS | Bhubaneswar

Covid hits mines revival, auction in State

28 September 2020 | PNS | Bhubaneswar

‘Bulldozing Opp in RS uncalled for'

28 September 2020 | PNS | Bhubaneswar

JSW flouts MCR; Govt suffers Rs 1,155-cr loss

28 September 2020 | BIJAY MISHRA | Bhubaneswar

‘Google puts out wrong Daughters Day’

28 September 2020 | PNS | Bhubaneswar

Govt still silent over ‘unjustified’ MoU; OPAF

28 September 2020 | PNS | Bhubaneswar

Sunday Edition

Politics in the workplace

27 September 2020 | Bhavna Dalal | Agenda

Krishna’s Manifests in Icons

27 September 2020 | Dr Asha Goswami | Agenda

Ways to stay productive

27 September 2020 | Dr Binay Singh | Agenda

When we accept God...

27 September 2020 | Ajit Kumar Bishnoi | Agenda

Astroturf | Seeds of future are in present

27 September 2020 | Bharat Bhushan Padmadeo | Agenda

Fantastic Moment

27 September 2020 | Shalini Saksena | Sunday Pioneer