India should worry about its public debt
- The growing clamour for a large fiscal expansion could lead to more uncertainty and volatility in the economy
- High levels of public debt in India have historically been associated with fiscal dominance, and more uncertainty and volatility in the economy. Also, public health and education allocations will suffer
NEW DELHI : Till 1972, India’s general debt—for the Centre and states—rose steadily to about 39% of gross domestic product (GDP) and then fell sharply in 1974. After 1996, it saw explosive growth, reaching 57% in 2005. And, in 2018, general debt was approximately 57% of GDP (Chart 1).