Lok Sabha Question No. 3939 (UNSTARRED), answered on 2016-12-09
Subject: Debt to GDP ratio
Ministry: FINANCE
Asked by: RABINDRA KUMAR JENA

- (a) whether the Government has made any assessment of debt to Gross Domestic Product (GDP) ratio of India;
- (b) if so, the details thereof during the last three years and India's position in comparison to other countries;
- (c) the total annual interest payment on loans and debts over the last three years and the current year; and
- (d) whether the Government has fixed a target for bringing down the debt to GDP ratio and if so, the details thereof?

## ANSWER

MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ARJUN RAM MEGHWAL)

- (a) and (b): The General Government debt as a percentage of GDP during the last three years is given in the following table:

| General Government Debt GDP Ratio (per cent)                                                      | General Government Debt GDP Ratio (per cent)                                                      | General Government Debt GDP Ratio (per cent)                                                      | General Government Debt GDP Ratio (per cent)                                                      |
|---------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------|
|                                                                                                   | 2013-14                                                                                           | 2014-15                                                                                           | 2015-16                                                                                           |
| General Government Debt Of which                                                                  | 66.8                                                                                              | 67.1                                                                                              | 68.6                                                                                              |
| Central Government Debt                                                                           | 47.4                                                                                              | 47.0                                                                                              | 48.0                                                                                              |
| Source: Status Paper on Government Debt; September 2016, Ministry of Finance, Government of India | Source: Status Paper on Government Debt; September 2016, Ministry of Finance, Government of India | Source: Status Paper on Government Debt; September 2016, Ministry of Finance, Government of India | Source: Status Paper on Government Debt; September 2016, Ministry of Finance, Government of India |

According to the Fiscal Monitor, published by the International  Monetary Fund, in October 2016, the  gross  debt  of  the  general  government  as  percentage  of  GDP  for  selected  countries  for  the years 2013, 2014 and 2015 is given below:

| General Government Gross Debt as per cent of GDP   |   General Government Gross Debt as per cent of GDP |   General Government Gross Debt as per cent of GDP |   General Government Gross Debt as per cent of GDP |
|----------------------------------------------------|----------------------------------------------------|----------------------------------------------------|----------------------------------------------------|
| Country                                            |                                             2013   |                                             2014   |                                             2015   |
| Argentina                                          |                                               42.2 |                                               43.6 |                                               52.1 |
| Brazil                                             |                                               60.4 |                                               63.3 |                                               73.7 |
| Canada                                             |                                               86.1 |                                               86.2 |                                               91.5 |
| China                                              |                                               36.9 |                                               39.8 |                                               42.9 |
| France                                             |                                               92.4 |                                               95.3 |                                               96.1 |
| Germany                                            |                                               77.1 |                                               74.5 |                                               71   |
| India                                              |                                               68   |                                               68.3 |                                               69.1 |
| Indonesia                                          |                                               24.8 |                                               24.7 |                                               27.3 |
| Italy                                              |                                              129   |                                              132.5 |                                              132.7 |
| Japan                                              |                                              244.5 |                                              249.1 |                                              248   |
| Russia                                             |                                               13.1 |                                               15.9 |                                               16.4 |

| South Africa                                    | 44.0                                            | 46.9                                            | 49.8                                            |
|-------------------------------------------------|-------------------------------------------------|-------------------------------------------------|-------------------------------------------------|
| United Kingdom                                  | 86.0                                            | 87.9                                            | 89.0                                            |
| United States                                   | 104.6                                           | 104.6                                           | 105.2                                           |
| Source: Fiscal Monitor of the IMF, October 2016 | Source: Fiscal Monitor of the IMF, October 2016 | Source: Fiscal Monitor of the IMF, October 2016 | Source: Fiscal Monitor of the IMF, October 2016 |

(c) Amount of interest payment on loans raised from domestic (through dated securities, Treasury Bills,  Compensation  and  other  bonds,  Ways  and  Means  advances  and  Small  savings)  and external sources during each of the last three years and Budget Estimates for the current year are given in the following table:

| Details of Interest Payments (Rs. crore)                                          | Details of Interest Payments (Rs. crore)   | Details of Interest Payments (Rs. crore)   | Details of Interest Payments (Rs. crore)   | Details of Interest Payments (Rs. crore)   |
|-----------------------------------------------------------------------------------|--------------------------------------------|--------------------------------------------|--------------------------------------------|--------------------------------------------|
| Source of Loans                                                                   | 2013-14                                    | 2014-15                                    | 2015-16                                    | 2016-17 (Budget Estimates)                 |
| Interest paid on borrowings (on outstanding and current year borrowings)          | 3,26,344                                   | 3,50,464                                   | 3,91,398                                   | 4,39,690                                   |
| Interest paid on external borrowings (on outstanding and current year borrowings) | 3,880                                      | 3,766                                      | 3,925                                      | 4,058                                      |
| Total                                                                             | 3,30,224                                   | 3,54,230                                   | 3,95,323                                   | 4,43,748                                   |
| Source: Ministry of Finance                                                       | Source: Ministry of Finance                | Source: Ministry of Finance                | Source: Ministry of Finance                | Source: Ministry of Finance                |

(d)  The  quantum of debt is primarily dependent on the fiscal deficit.  In the  Medium Term Fiscal Policy  Statement laid before the Parliament, along with Budget 2016-2017, the fiscal deficit has been projected to decline from 3.9 per cent (Revised Estimates) of GDP in 2015-16 to 3.5 per cent of GDP in BE 2016-17. As per the Medium Term Fiscal Policy Statement laid before the Parliament along with Budget 2016-2017, the total outstanding liabilities of the Central Government at the end of  2017-18  and  2018-19  have  been  estimated  at  46.8  per  cent  and  44.4  per  cent  of  GDP respectively.

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