Economic Survey 2022-23: Govt debt-to-GDP ratio rose to 89.6% during pandemic years

Government debt to gross domestic product (GDP) ratio had increased by around 14 percentage points during the pandemic years but the country’s capex-led growth will protect its ability to service its debt, according to the Economic Survey 2022-2023.

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The Economic Survey 2022-2023 was released on January 31.

“The General Government Debt to GDP ratio increased from 75.7 percent of end-March 2020 to 89.6 percent at the end of the pandemic year FY21. It is estimated to decline to 84.5 percent of GDP by end-March 2022,” stated the report.

“The emphasis on capex-led growth will enable India to keep the growth-interest rate differential positive,” it added. The growth-interest rate differential helps gauge a country’s ability to service its debt. A positive differential is desirable.

“As shown... below, this differential has historically been positive for India. A positive growth-interest rate differential keeps the debt levels sustainable,” stated the Survey.