India refutes IMF assessment on debt

The Centre has refuted the assessment of the International Monetary Fund’s assessment that India’s general government debt could be 100 per cent of the country’s GDP under adverse circumstances by fiscal 2028. General government debt includes debt of both the Centre and the state governments.

- NIVEDITA MUKHERJEE 

In its latest Article IV consultations with India, the IMF warns that “given the shocks that India has experienced historically, and instances of fiscal slippages between 2000 and 2020, the baseline carries the risk that, should similar shocks materialize, debt would exceed 100 per cent of GDP in the medium term.

The Indian Government has, however, countered the view as “certain presumptions made taking into account possible scenarios that does not reflect factual position”, describing it as a worst-case scenario and not fait accompli”. General government debt in India is overwhelmingly rupeedenominated, with external borrowings (from bilateral and multilateral sources) contributing a minimal amount.