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India Uses Right Policies to Lower High Debt Level: IMF

The GDP ratio is the ratio between a country’s government debt and its gross domestic product or GDP.

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India
2 min read
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India has "quite a high" debt to GDP ratio, but New Delhi is trying to lower it using "the right policies", the International Monetary Fund has said.

The GDP ratio is the ratio between a country's government debt and its gross domestic product or GDP.

India's general government debt remained relatively high, at 70 percent of the GDP in 2017, Abdel Senhadji, Deputy Director, IMF Fiscal Affairs Department, told reporters at a news conference.

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The debt level is relatively high (in India), but the authorities are planning to bring it down over the medium term with the right policies.
Abdel Senhadji

In fiscal year 2017-2018, India is planning to continue with the consolidation in the current fiscal year and over the medium term, the top IMF official said.

"They are, in fact, targeting their federal deficit of three percent over the medium term, and they are targeting also a debt ratio of 40 percent over the medium term at the federal level, which corresponds to about 60 percent at the general government level. And we believe that those targets are appropriate," the IMF official said.

According to NDTV, IMF however cautioned other economies such as China, by saying “public debt in advanced and emerging market economies are currently at historic highs."

The report adds that “too much debt” could lead to a variety of problems.

The debt to GDP ratio works as an indicator that helps investors determine how healthy a country’s economy is and whether it has too much debt.

(With inputs from PTI and NDTV)

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