"India Still Below 2002 Debt Level": Finance Ministry On IMF Report
NDTV
The finance ministry has said that a majority of India's general government debt is in rupees, and external borrowings make up only a small portion.
Following reports of the International Monetary Fund cautioning India on alleged government debt vulnerabilities, the Centre on Friday said that certain presumptions have been made, which do not reflect the factual position.
One of the key points that the finance ministry has raised is that a majority of India's general government debt, which includes those of the Centre and states, is in rupees, and external borrowings make up only a small portion. It pointed out that the rollover risk is low for domestic debt.
In its Article IV consultations with India, the IMF had said that, under adverse shocks, the country's general government debt could be 100% of debt to GDP ratio by FY 2028. The ministry has clarified that this was mentioned as an extreme possibility like "once-in-a-century Covid-19" and was among various favourable and unfavourable scenarios that were listed. The ministry has emphasised that in that instance, the IMF was talking only of a worst-case scenario and this is not a "fait accompli".
