Debt To GDP Ratio: India is also getting caught in the debt trap. According to the International Monetary Fund, India’s debt ratio to GDP is estimated to be 84 percent by the end of 2022, which is currently 69.62 percent. The IMF says that India’s debt to GDP ratio is much higher than all the emerging economies of the world.
Clear policy on fiscal deficit needed
The IMF has said that the ratio of debt to GDP will increase and it also believes that there will be no difficulty in bearing the burden of this debt. Paolo Mauro, deputy director of the IMF’s Department of Financial Affairs, said that it is very important for India to have a clear policy regarding fiscal deficit in the medium term. He said India needs to reassure people and investors that things are under control, and things will become less worrisome with time.
Debt burden, but India is doing better
IMF Asia Pacific Director Krishna Srinivasan said that economic growth of all countries is declining but India is doing better. He said the debt ratio could be around 84 per cent of GDP by the end of 2022. This is higher than many emerging economies of the world. He said that when the pace of economic growth of many countries is slowing down, India is not unaffected by it but is doing better than others.
debt burden on these countries
Let us tell you that Japan’s debt ratio is 237 percent of GDP, Italy’s 135 percent, Singapore’s 126 percent, America’s 107 percent, France’s 98.10 percent, UK 80.70 percent while India’s is 69.62 percent. Pakistan has 84.80 percent.
Need to deal with debt burden
According to the IMF, 15 percent of GDP has to be borrowed every year. Therefore, it is very important to keep an eye on the pace of taking loans and therefore it is very important to take care of the fiscal deficit which is currently 10 percent of GDP. But the better situation for India is that traditionally the pace of economic development here has been better.
read this also
Direct Cash Transfer: IMF called Direct Cash Transfer Scheme and welfare schemes of the government a miracle!