The third status report on the public debt position of the government expects the debt-GDP ratio in India to decline in the coming years.
The debt-GDP ratio of India stood at 66 per cent at the end of 2012-13 compared to 65.6 per cent in the previous year.
The medium-term fiscal policy statement by the union government expects the debt-GDP ratio of the centre to decline to 42.3 per cent by 2015-16.
During the 1980s and 1990s, the Indian government accumulated huge debt. After peaking at 83.3 per cent in 2003-04, the country’s debt-GDP ratio has been declining in the following years.
The level of debt reflects the cumulative effect of government borrowings over time, which tends to be higher for a developing economy owing to the need for creating adequate infrastructure.
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