Having averaged 60 percent of GDP in the 1980s, it rose to 70 percent in the 1990s and 80 percent in the 2000s. [...] Note: We use the shares of the Centre and States in total debt as weights to calculate weighted average maturity on the General Government outstanding stock, for Q3 2022-23, the shares are assumed to be the same as those for 2021-22. [...] Alternatively, the Office of the Comptroller and Auditor General and RBI have attempted to estimate contingent liabilities directly; as of March 2021, they put these at 2.5 percent of GDP for the Central Government and 3.7 percent of GDP for the States (Figure 15). [...] Similar results are obtained if instead of comparing the States which are below and above the median, we compare the values of these variables for the top one-third of the States for the increase in debt-to-GDP ratio with the bottom one-third of the States. [...] Debt reduction was 6.7 percent of GDP in the first episode, 16.9 percent in the second.23 The first episode followed a balance-of-payments crisis during which India signed up for an IMF program.24 The IMF loan was conditioned on fiscal consolidation designed to reduce the Central Government’s deficit from 8.5 percent of GDP in 1990-91 to 5 percent in 1992-93 (Chopra and Collyns 1995).
- Pages
- 62
- Published in
- India
Table of Contents
- 1. Introduction 1
- 3. Debt Composition 9
- 4. Debt Sustainability 15
- 5. Past Episodes of Debt Consolidation 30
- 6. Costs and Risks 33
- 7. Conclusion 36
- References 37
- Appendix A Data Table 40
- Appendix A Tax Buoyancy 41
- Appendix B Debt and Deficit of the Centre and the States 42
- Appendix C Debt-to-GDP Ratio and Interest Rates on Government Debt General Government 46
- Appendix D Bank-Sovereign Nexus 50
- N.K. Singh 54
- M. Govinda Rao 54
- Summary of the Paper 54
- Comments 55
- Kenneth Kletzer 58
- General Discussion 60
