India's economy is continuously performing well. Right now, when the pace of economic growth is slow across the world, India is progressing at a fast pace. Many agencies including IMF have described India as the engine of global growth. However, amidst all this good news, IMF has pointed towards a dangerous trend and has alerted India. This is an indication of IMF towards the tightening grip of debt on GDP.
IMF cautioned on this matter
IMF has recently given information about India's debt in a report. Gave. In a news published in Business Standard this week, it was told that the International Monetary Fund has warned India about debt. IMF fears that in the medium term, India's government debt may increase to such a level that it may exceed the country's GDP. This means that the total government debt can be more than 100 percent of the country's GDP.
What do the debt figures say
However, if we look at the figures, a different story emerges. India's debt-to-GDP ratio has been around 80 percent for almost two decades. In the financial year 2005-06, this ratio was 81 percent, that is, at that time the total government debt was equal to 81 percent of the GDP. This ratio increased in the meantime and reached 84 percent in 2021-22. However, after that this ratio again came down to 81 percent in 2022-23. That means, currently the total debt is equal to 81 percent of the country's GDP and the same level was in 2005-06 also.
Increased growth forecast in the medium term
IMF on the economic growth front. Says that the risks for India are balanced. Along with this, the International Monetary Fund increased India's growth rate estimate in the medium term from 6 percent to 6.3 percent. For this, the agency has cited higher than expected capital expenditure and better situation in terms of employment as the reasons.
Challenges of the Indian economy
On the external front, India will face a global slowdown in the near future. You may have to face some problems. Disruption in the global supply chain may make commodity prices volatile, which may increase fiscal pressure on India. On the domestic front, inflation may rise again due to seasonal reasons. Due to this, the country may have to resort to restrictions on food exports. On the other hand, better than expected consumer demand and private investment are expected to support the economic growth rate.
Get more latest business news updates