look news india
Ahmedabad: The government has shown significant focus and stringency on fiscal consolidation in the interim Budget and this should lead to an improvement in India's credit rating, said 15th Finance Commission Chairman N. No. Singh has said. “If you continue on this fiscal path, you will see the debt-to-GDP ratio going down, not up, and that is a very important signal for the rating agencies and the market.”
In the interim budget, the Finance Minister has set the fiscal deficit target for 2024-25 at 5.1 percent, which is less than the estimate of 5.3 percent. Moreover, the revised fiscal deficit estimate for FY2024 is 5.8 per cent, which is 0.10 per cent lower than the original target.
Let us tell you here that India has differences with global rating companies regarding rating. The government says India has been given the lowest level of investment grade, which is not appropriate considering its economic strength.
Singh said, 'We are concerned about the functioning of the rating agencies. We have been raising questions about ratings for a long time and this concern still persists because this methodology is not being implemented in all countries. If we look at the debt to GDP ratio of G7 countries, it is above 100 percent.
The Fiscal Responsibility and Budget Management (FRBM) Review Committee in its January 2017 report suggested that the central government should reduce its debt to GDP ratio to 40 per cent by fiscal year 2023. Now Modi government has revised it to 2025. At the end of 2020-21, the debt to GDP ratio of the central government was 61.57 percent.