How telecom dues may help reduce India’s fiscal deficit4 min read 28 Sep 2022, 11:09 PM IST
A package of bank credit extended with a sovereign guarantee could effect a sharp fiscal correction
India, like the rest of the world, is going through a difficult economic situation, with high inflation, a steep depreciation of the Indian rupee and rising interest rates. The seriousness of these should also be seen in the context of the Union Budget for fiscal year 2022-23, whose fiscal deficit at ₹16.61 trillion, representing 6.4% of gross domestic product (GDP), was already higher than desired. To fund this large deficit, the Reserve Bank of India (RBI) announced a plan to raise ₹14.95 trillion through market securities this year, which will further raise the interest rate on such borrowings.