Business

India Likely To Have Stable Debt-To-GDP Ratio

A senior IMF official predicted on Wednesday that India’s debt-to-GDP ratio will remain constant in the future and suggested rationalizing and streamlining the Goods and Services Tax (GST). According to Paolo Mauro, Deputy Director of the IMF Fiscal Affairs Department, the growth in the global public debt-to-GDP ratio would gradually resume in the medium term. “We forecast that the global public debt-to-GDP ratio would reach 100% once more by 2028.

The scenario has altered since, at the height of the epidemic, central banks and governments were intensely focused on assisting citizens, businesses, and preventing an economic collapse and deflation. They are currently in a radically different situation with significant inflation and undoubtedly considerably more brisk economic activity. The IMF predicts a significant increase in China’s debt ratio since the country’s economic growth may be a little slower than in recent years, in part due to population ageing.

In response to a query regarding India, Mauro stated that the deficit is suitably reduced and that infrastructure is appropriately prioritized in this year’s Union Budget.

We are not discussing a complete redesign, but rather a possible slight rationalization. There are numerous things that qualify for preferential GST treatment, as well as numerous rates. Therefore, Mauro stated, “Just making it a little bit simpler would be beneficial.

“It would be appropriate to reverse those again,” he remarked in reference to the early 2022 reductions in the fuel excise tax. “At some point, you don’t want to be giving these generalized subsidies to everyone,” he added. Supporting those who are genuinely in need is necessary, but not always.

 

The next stage, he continued, is to broaden the base for both personal and corporate income taxes, but he also cautioned that subsequent financial ramifications might become apparent. Given everything that has happened in the energy markets, “there are some companies in particular, in the electricity distribution sector that may be under difficulties and therefore there may at some point be the need for intervention on the part of the government,” Mauro added.

 

Kanchan Nautiyal

Recent Posts

SC Upholds Rajasthan’s Electricity Regulations; Dismissing Power Companies Plea

The Supreme Court has granted a major relief to the Rajasthan government by upholding the…

12 hours ago

SC Expresses Concern Over Rising Trend Of False Rape Cases On Marriage Promises

The Supreme Court has expressed concern over the rising tendency to register rape cases based…

12 hours ago

Adani Ports Mundra Sets National Record With Historic 200 MMT Cargo Handling Milestone

Adani Ports & Special Economic Zone set a national record by handling 450 MMT of…

13 hours ago

SC Seeks Response On Vikas Yadav’s Bail Plea In Nitish Katara Murder Case

SC issues notice to UP govt, Neelam Katara on Vikas Yadav’s interim bail plea in…

13 hours ago

SC Slams Telangana CM Over Remarks On BRS MLAs’ Disqualification Case

The SC expressed displeasure over Telangana Chief Minister A Revanth Reddy’s remarks regarding the disqualification…

13 hours ago

Jamaat-e-Islami Hind (JIH) Opposes Waqf Bill; Calls It Legislative Discrimination

JIH President Syed Sadatullah Husaini condemns the Waqf Amendment Bill for singling out Muslims and…

14 hours ago