A customer counts Indian one-hundred rupee banknotes (Photographer: Dhiraj Singh/Bloomberg)

There’s A Need To Focus On Reducing Debt In 4-5 Years: Economic Affairs Secretary Subhash Chandra Garg

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

Pointing out that fiscal deficit is moving towards the ideal level of 3 percent of gross domestic product and inflation is moderate, Garg also said India’s macroeconomic parameters are among the best globally.

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 weight to the debt-to-GDP ratio of the country. We focus more on the fiscal deficit presently. But going forward, that is the area where we will focus, Garg said at FICCI’s annual general meeting.

Also read: India Growth Forecast Cut by Fitch Amid RBI-Government Spat

On inflation, he said, “I think we have more or less conquered it, 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 I think we are reasonably assured that inflation is less of a worry.”

Headline inflation fell to a 17-month low of 2.33 percent in November, primarily due to a favourable base effect and fall in prices of vegetables and cereals.

RBI Board Meeting

Speaking about Friday’s board meeting of the Reserve Bank of India, Garg said the board discussed governance, liquidity and other important issues.

All these issues would be examined and discussion will take place between the Reserve Bank and the government, he said, adding there is no agenda for the next board meeting as of now.

Asked if there was any discussion on interim dividend, he replied in the negative.

Also read: First RBI Board Meet Under Shaktikanta Das Steers Clear Of Controversial Decisions