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India’s Public Debt Ratio projected to increase

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    17th Oct, 2020

  • As per the International Monetary Fund (IMF), India’s public debt ratio is projected to increase by 17% to almost 90% because of an increase in public spending due to Covid-19.
  • The ratio is projected to stabilise in 2021. 
  • It will slowly decline up to the end of the projection period, in 2025.
  • The pattern of public debt in India is similar to the pattern around the world. 
  • This debt-to-GDP ratio is used to compare a country’s public debt to its GDP. 
  • It is often expressed as a percentage. 
  • By comparing what a country owes (debt) with what it produces (GDP), the debt-to-GDP ratio indicates a particular country’s ability to pay back its debts. 
  • A country with a high debt-to-GDP ratio finds it difficult to pay off public debts.

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