India's debt-to-GDP ratio in 2022 was 81 percent. This is much lower than economies like Japan (260.1 percent), Italy (140.5 percent), United States (121.3 percent), France (111.8 percent). ), and UK (101.9 percent) in the same period. On the other hand, many countries have faced the risk of sovereign default in recent years. He said the number of countries facing high debt levels has increased from 22 in 2011 to about 60 in 2022.The Finance Minister said that India's external debt outlook is strong in comparative analysis with other LMICs. Considering the ratio of total external debt to gross national income (GNI), India emerges as the third least indebted country among all LMICs. It is an important indicator of a country's ability to handle its external debt. The ratio of India's total external debt to its exports is 91.9 percent, placing it as the fifth least indebted country among LMICs in this aspect.
He said the share of India's short-term debt in total external debt is 18.7 per cent, which is lower than other LMICs like China, Thailand, Turkey, Vietnam South Africa and Bangladesh, which have higher percentages.A low proportion of short-term loans is beneficial as it reduces the pressure of immediate repayment.
With regard to the central government debt, it is also important to note that it is largely denominated in rupees, with external borrowings (from bilateral multilateral sources) contributing a minimal amount (less than 5 per cent of the total debt), which That reflects the risk of volatility. The exchange rate will be below ten.
Domestically issued debt of the central government, which is mostly raised through government securities, has a weighted average maturity of about 1 year, indicating low rollover risk. This indicates the sustainability of the central government's debt.Therefore, the risk profile of India's government debt is safe and prudent in the context of accepted parameters or indicator-based approach to debt sustainability, he said.
India's government external debt as a percentage of GDP (2020) was only 6.7 percent, compared to 24.4 percent of Mexico, 28.6 percent of Pakistan, 20.6 percent of Indonesia and 15.8 percent of Turkey.
Criticizing the previous Congress-led UPA amid the ongoing Lok Sabha election campaign, the Finance Minister said that during its tenure, India's external fragility had increased due to excessive dependence on external commercial borrowings (ECBs). Between 2004-14, ECBs grew at a dismal CAGR of 21.1 per cent, while in the nine years from FY14 to FY23, they grew at an annual rate of 4.5 per cent.
He said, “UPA's legacy of fiscal shortsightedness and hidden debt is a stark contrast to our era of transparent, strategic and transformative investments.Under the P Modi-led government, we are building a legacy of development, transparency and accountability."
He said the share of India's short-term debt in total external debt is 18.7 per cent, which is lower than other LMICs like China, Thailand, Turkey, Vietnam South Africa and Bangladesh, which have higher percentages.A low proportion of short-term loans is beneficial as it reduces the pressure of immediate repayment.
With regard to the central government debt, it is also important to note that it is largely denominated in rupees, with external borrowings (from bilateral multilateral sources) contributing a minimal amount (less than 5 per cent of the total debt), which That reflects the risk of volatility. The exchange rate will be below ten.
Domestically issued debt of the central government, which is mostly raised through government securities, has a weighted average maturity of about 1 year, indicating low rollover risk. This indicates the sustainability of the central government's debt.Therefore, the risk profile of India's government debt is safe and prudent in the context of accepted parameters or indicator-based approach to debt sustainability, he said.
India's government external debt as a percentage of GDP (2020) was only 6.7 percent, compared to 24.4 percent of Mexico, 28.6 percent of Pakistan, 20.6 percent of Indonesia and 15.8 percent of Turkey.
Criticizing the previous Congress-led UPA amid the ongoing Lok Sabha election campaign, the Finance Minister said that during its tenure, India's external fragility had increased due to excessive dependence on external commercial borrowings (ECBs). Between 2004-14, ECBs grew at a dismal CAGR of 21.1 per cent, while in the nine years from FY14 to FY23, they grew at an annual rate of 4.5 per cent.
He said, “UPA's legacy of fiscal shortsightedness and hidden debt is a stark contrast to our era of transparent, strategic and transformative investments.Under the P Modi-led government, we are building a legacy of development, transparency and accountability."
