‘Need to reduce public debt over next 4-5 years’

Source: The Hitavada      Date: 16 Dec 2018 09:57:08


The Indian economy has a large overhang of public debt and there is a need to focus on reducing this in the next 4-5 years, Economic Affairs Secretary Subhash Chandra Garg said on Saturday.

Pointing out that fiscal deficit is moving towards the ideal level of 3 per cent of GDP and inflation is moderate, Garg also said India’s macroeconomic parameters are among the best globally. “Whether you look at fiscal deficit, or you look at the inflation management or reserves. Fiscal deficit we are very close to now coming to 3 per cent level considered ideal. We still have an overhang of a very large public debt. Maybe in next 4-5 years that is the area where we will need to focus,” Garg said at the FICCI Annual General Meeting.

Rating agencies have raised concerns over the level of public debt and refrained from upgrading the sovereign rating of the country. “Most credit rating agencies give a lot of weightage to the debt to GDP ratio of country, we focused more on the fiscal deficit presently. But going forward, that is the area where we will focus,” he said.

“I think we have more or less conquered, I wouldn’t say things may not go wrong, can go wrong sometimes, there are certain external factors like oil. Which are not completely in our control. But we are reasonably assured that the inflation is less of a worry,” he said. Headline inflation fell to a 17-month low of 2.33 per cent in November. Garg also said India can become a USD 10 trillion economy by 2030 if some of the concerns are addressed.  “We can build a new economy whether you talk about 2025, 2022, 2030, a USD 10 trillion economy by 2030 or USD 5 trillion by 2025, all these are feasible, we can achieve it if we pay attention to all these major traits,” he said.