India’s Public Debt

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As per Moody’s Investors Service, India’s public debt level is among the highest in emerging economies with a quantitative easing programme underway, while its debt affordability is among the weakest.

Important points from Moody's analysis

  • With the exception of Chile, most of the 11 emerging markets have weak government effectiveness, suggesting potential risks executing fiscal reforms or consolidation plans.
  • Debt affordability varies widely, with Ghana and India [rated Baa3 negative] weakest. 
  • Across the 11 emerging markets, India, South Africa and Ghana have the highest public debt and weakest debt affordability.
  • “Most economies’ debt burdens will rise before they stabilise overthe next few years. 
  • Depending on recovery prospects and future debt servicing costs, high debt levels may become unsustainable for the more vulnerable economies,

What is Public Debt? 

  • Public debt is the total amount borrowed by the government of a country.
  • Public debt includes the total liabilities of the Union government that have to be paid from the Consolidated Fund of India. 

Source : the Hindu

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