India's Debt to GDP May Surge to 87.6% at Around Rs 170 Lakh Crore in FY 2020-21 Amid Economic Slowdown, Says SBI Ecowrap

Mumbai, July 20: Amid the economic slowdown, India's gross debt could rise to around Rs 170 lakh crore this fiscal, estimates SBI Ecowrap. The research publication of the State Bank of India even claimed that India's debt to gross domestic product (GDP) may surge to 87.6 per cent in FY 2020-21 in comparison to 72.2 per cent last year.

Informing about the details of the research, SBI Ecowrap said in a note, as quoted by CNBC News18, "The GDP collapse is pushing up the debt to GDP ratio by at least 4 per cent, implying that growth rather than continued fiscal conservatism is the only mantra to get us back on track." India Needs Economic Expert Like Former PM Manmohan Singh to Pull Country Out of Financial Crisis, Says Sharad Pawar.

Adding more, the SBI Ecowrap mentioned, "We again reiterate that the current thinking of rating downgrade in policy circles is a false negative as India’s rating is likely to face a litmus test of the downgrade in FY21 depending on what we have done to bring growth back to track."

Among other details, the SBI's research publication stated that higher debt would lead to shifting of the Union government's Fiscal Responsibility and Budget Management (FRBM) target of combined debt to 60 per cent of GDP by FY-2023 by seven years. SBI Ecowrap predicted that the target now can be seen achievable in FY 2030. The SBI body recommended direct monetisation as a preferred policy option to tackle the issue.

(The above story first appeared on LatestLY on Jul 20, 2020 10:39 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).