Telangana govt exploring BVLOS drone use for vaccine delivery (See 'TOG News')India, UK to strengthen science, tech cooperation (See 'TOG News')GST on Khari & Bread-creamI-T - Rate of depreciation allowed in respect of software cannot be reduced for current AY, where higher rate of depreciation in respect of same software is consistently allowed to assessee in preceding & succeeding AYs: ITAT (See 'TOG Latest')Central Excise - Duty cannot be demanded on containers used for packing of inputs on which credit has been taken, when cleared from the factory of the manufacturer availing credit as these containers cannot be treated as waste arising out of manufacturing process: CESTAT (See 'TOG Latest')Central Excise - Under the Rules of Interpretation, a proviso is sub-servent to the Rule & does not override the provisions of Rule, of which it is a proviso: CESTAT (See 'TOG Latest')COVID-19: Department of Space augments oxygen supply (See 'TOG News')COVID-19: Army sets up cell to coordinate with civil authorities (See 'TOG News')COVID-19: PM reviews States' public health response (See 'TOG News')Navy warships, Railways' Oxygen Express deliver LMO (See 'TOG News')MHA asks States, UTs to conduct fire safety review of hospitals (See 'TOG News')Central Coast Guard catch 4 Burmese poachers in Andaman (See 'TOG News')Central govt employees urged to get vaccinated ‘at earliest' (See 'TOG News')COVID-19: DRDO installs 2 oxygen plants in Delhi (See 'TOG News')COVID-19: Centre boosts medical infra in 38 institutions pan-India (See 'TOG News')First batch of UCO-based biodiesel flagged off from Delhi (See 'TOG News')Centre augmenting Covid-related infrastructure in northeast: MoS (See 'TOG News')Ayush Ministry increases availability of AYUSH 64 Covid drug (See 'TOG News')COVID-19: NEET-PG exam postponed to boost medical personnel (See 'TOG News')SUTRA mathematical model couldn't predict second Covid wave: Scientists (See 'TOG News')
Tax on Go


India's debt-to-GDP ratio at 90% due to COVID-19: IMF
By TOG News service
Apr 09, 2021

TOG NEWS SERVICE, WASHINGTON, APR 09, 2021: THE COVID-19 pandemic has hurt India hard, resulting in a "very substantial " increase in the debt-to-GDP ratio from 74 per cent in 2019 to 90 per cent by the end of 2020, said the International Monetary Fund (IMF) on Wednesday.

Deputy Director of IMF's Fiscal Affairs Department Mr Paolo Mauro said that while the increase was large, similar situations have been seen across other emerging markets and advanced economies as well.

According to IMF figures, India's debt ratio at the end of 2019, prior to the pandemic, was 74 percent of the Gross Domestic Product (GDP) and went up to almost 90 percent of GDP by end of 2020.

"The way we look at it is that, of course, the pandemic has hurt India and other emerging markets very hard… but it is something that other emerging markets and advanced economies have experienced as well," he added.

Mr Mauro said the priority going forward, is to focus on getting the virus under control and vaccination programmes to bring economic recovery. The immediate need is to continue supporting people and firms, and focus on supporting the most vulnerable.

"For the case of India going forward, in our baseline forecast, we expect that the debt ratio will gradually come down as the economy recovers. In our baseline forecast under the assumption of healthy economic growth in the medium term, we see debt returning to about 80 percent over time," said the IMF official.

Emphasising the important of reassuring the people and investors that the public finance is under control through a credible medium - term fiscal framework, is another priority.

"This year India has already announced its budget. It continues to be accommodative. It continues to support health, and it continues to support people. Over the next years, it is quite likely that the deficit will be reduced in part as the economy recovers," he said.

More generally in emerging markets, the priority, given the very large increases in inequality, given the large increases in public debt, is to mobilise revenues in the medium-term.

Mr Vitor Gaspar, Director of IMF's Fiscal Affairs Department, said in emerging markets, the differences across countries are extremely important.

Countries with better access to financing, with stronger buffers, stronger fundamentals are able to give more fiscal support and can sustain that support for longer while having more options in terms of policymaking, he explained.

Given widening deficits and contraction in economic activity, worldwide debt increased sharply to 97 percent of GDP in 2020, said the monetary body. It will increase slower to 99 percent in 2021 before stabilising below but close to 100 percent of GDP.