Budget Byte: Borrowing to boost spending but debt will bother govt

Joseph B. Hash

Government borrowed intensely in FY21 to sustain the Covid-19 income shock. This may perhaps choose India’s bulging debt pile to near to ninety for every cent of gross domestic item. But as prolonged-phrase debt grows, interest payments increase in coming years. In FY21 till November, interest charges had been almost […]

Government borrowed intensely in FY21 to sustain the Covid-19 income shock. This may perhaps choose India’s bulging debt pile to near to ninety for every cent of gross domestic item. But as prolonged-phrase debt grows, interest payments increase in coming years. In FY21 till November, interest charges had been almost 50 % of the income receipts.


But even in advance of Covid-19 struck the overall economy, govt was borrowing at a amount that was extremely near to the nominal GDP growth. As FY21 finishes, economic growth would even now possibly lag the amount at which corporates borrow. The previously nominal GDP growth outpaces prolonged phrase interest premiums in the overall economy, the better.

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1st Revealed: Thu, January fourteen 2021. 17:32 IST

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