12 Jul 2022 , 03:11 PM
Concerns regarding India's foreign debt were dispelled by the Centre, which noted that the Center only has a portion of $130.8 billion, or 21%, of the country's total external debt burden of $620.7 billion.
The Special Drawing Right (SDR) allotment to India is also included. According to a source who spoke with ET, "the myth going around that the central government is saddled with debt is untrue," and that more than 40% of the debt is held by non-financial firms.
Officials highlighted the debt situation in response to worries over India's external debt given that repayments of $267 billion are due in less than a year.
There was concern that the repayments would further reduce India's foreign exchange reserves and result in additional currency devaluation. According to a source, "This study is erroneous, insufficient, and it omits several fundamental information."
Officials informed ET that while it is true that $267.7 billion in debt must be repaid in less than a year, the Center's part of that debt is just $7.7 billion, or less than 3%; as a result, the government's debt level is quite manageable and appears to be safe.
According to RBI statistics, the central government's debt decreased from 52.2 % of GDP at the end of the fiscal year 2013—14 to around 51.8 % at the end of the fiscal year 2019—20. However, due in large part to Covid-19, this increased once more in FY21, this time by approximately 10% of GDP in a single year.
At 86.9 % of GDP, India's gross public debt is substantial but better than that of many other nations, according to authorities. The gross public debt of the US is 125.6 %, that of France is 112.6 %, that of Canada is 101.8 %, that of Brazil is 91.9 %, and that of the UK is 87.8 % of GDP.
The proportion of external debt to total debt decreased from around 6.4 % in 2013—14 to 4.7 % in 2021—22.
State debt: Data, however, raises questions about certain states' debt, which has previously been repeatedly raised by the RBI and analysts. There is also proof that numerous states have turned to borrow outside of their budgets.
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