Motilal Oswal: India’s Government Debt Likely To Stand At 80% Of GDP By FY30

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.During the past six years, fiscal spending (consumption plus investments) has been one of the key drivers of economic activity. While real gross domestic product growth averaged at 6.8% between FY14 and FY20, real fiscal spending grew at an average of 9% during the period.In FY20, while real GDP growth weakened to 4.2%, fiscal spending is estimated to have contributed 1.1 percentage point or 27% to annual real GDP growth. During the past three years, government spending has contributed almost a quarter to annual real GDP growth.The Covid-19 pandemic, however, has hurt the government’s ability to continue to do so over the next decade. Our estimates suggest India’s general government (center and states) debt rose to 75% of GDP in FY20 from 70% in FY18.It is likely to reach 91% of GDP in FY21 (the highest level since 1980 – since the availability of data) and stay at more than 90% of GDP up to FY23.This surge in India’s government debt-to-GDP ratio would restrict its ability to grow its spending significantly and support economic activity in the 2020s decade, as it has done in the past few years..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Motilal Oswal: India’s Government Debt Likely To Stand At 80% Of GDP By FY30

Motilal Oswal: India’s Government Debt Likely To Stand At 80% Of GDP By FY30

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