India has high debt like China, but risks are moderated: IMF

The Indian economy is attracting the world's attention. Various international bodies have predicted that Indian growth will continue.With the IMF raising India's GDP projection by 0.2 per cent to 6.3 per cent, the BJP asserted on Wednesday that it is an acceptance of the Indian economy's strength and fast growth amid slowing global economy.BJP national spokesperson Syed Zafar Islam told a press conference that global institutions have "acknowledged" that India's leadership has been been able to make its handling of the economy a template for the world."Modinomics is being acknowledged globally," he said, praising Prime Minister Narendra Modi's handling of economy.

India is on track to retain its title as the fastest-growing economy globally! pic.twitter.com/CGsHofbvUp

— BJP (@BJP4India) October 11, 2023

Meanwhile, the International Monetary Fund has said that India has a high debt like that of China but the risks associated with it are not as great as that of its northern neighbour, a senior official from IMF,advising India in the medium term to have an ambitious fiscal consolidation plan that brings down deficits."The current debt in India is also high. It stands at 81.9 per cent of GDP. Compared to China, which is 83 per cent, it is very similar. Also, when we compare India's debt to the pre-pandemic level in 2019, it was 75 per cent. So it is still quite a bit higher," Ruud de Mooij, Deputy Director, Fiscal Affairs Department at International Monetary Fund, told PTI in an interview."What we also see in India is a deficit that is 8.8 per cent projected for 2023. In India, a large portion of this is because of expenditures on interest. They pay a lot of interest on their debt: 5.4 per cent of GDP is spent on that, and the primary deficit is 3.4 per cent. So together they add up to 8.8 per cent," he said.
However, former economic affairs secretary Atanu Chakraborty said,India is expected to become a USD 30-trillion economy by 2050 pushed by robust consumption and exports.International financial institutions have projected India's growth to be around 6.3 per cent this year and inflation at about 6 per cent, so nominal GDP would be around 10-12 per cent, he said."If this kind of pace continues for some year, it will make India a USD 30-trillion economy by 2045-50 with per capita income of USD 21,000," he said at an event organised by KPMG in New Delhi. He is the chairman of the HDFC Bank also.