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Advising India in the medium term to have an ambitious fiscal consolidation plan that brings down deficits, the International Monetary Fund’s Deputy Director, Fiscal Affairs Department, Ruud de Mooij said that India has a high debt like that of China but the risks associated with it are not as great as that of its northern neighbour. He said ‘The current debt in India is also high. It stands at 81.9 per cent of GDP. Compared to China, which is 83 per cent, it is very similar. Also, when we compare India's debt to the pre-pandemic level in 2019, it was 75 per cent. So it is still quite a bit higher’.
He further said ‘What we also see in India is a deficit that is 8.8 per cent projected for 2023. In India, a large portion of this is because of expenditures on interest. They pay a lot of interest on their debt: 5.4 per cent of GDP is spent on that, and the primary deficit is 3.4 per cent. So together they add up to 8.8 per cent’. He added that India's debt is not projected to rise like in China. It, in fact, is projected to fall slightly by 1.5 per cent to 80.4 per cent in 2028.
He said one of the reasons is that growth in India is much higher. India is one of the countries with really high growth. This matters of course for the debt to GDP ratio. Also, just to note that the risks are moderated by some factors. He observed the risk factor in India is the state level risks. Some states really have high debts, have high financing needs and face a high interest burden. This is a factor that does mean that there are significant risks also for India.
Mooij said one of the ways in which India could usefully support fiscal consolidation is by strengthening the tech system. There are several opportunities in India. There are opportunities in the general sales tax, which has multiple rates, many exemptions, and maybe not all of them are effective. Improving the design of the general sales tax could contribute to this. He also see opportunities for broadening the base of the personal income tax and the corporate income tax where there are many loopholes that can often be addressed.
MoneyWorks4Me rating and ranking of funds for SIP is available to subscribers only. Moneyworks4Me is not a rating and ranking agency, however it is required that users have a way of selecting funds and building a Portfolio. The method used by it are described below to enable users to understand the logic behind the rating and ranking Subscriber will find more details on this in the various content made available from time to time. In case you need more please write to besafe@moneyworks4Me.com
MoneyWorks4Me rates and ranks mutual funds based on the following data-driven system:
Funds ranking in screeners: Performance Consistency and Quality are two parameters used for ranking funds for SIP. The ranking as follows GG, GO, GR, OG, OO, OR, RG, RO and RR.
With the same color-coded funds, the one with the higher Average 3-year rolling returns (over 5 to 10 years), the number that appears in the Performance tag, ranks higher.
Here is the summary:
The third tag Upside Potential is not relevant for SIP. It is relevant for lumpsum investments in Mutual Funds.
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