India’s gross debt seen at 88% of GDP in FY21: SBI Report

As the coronavirus pandemic brings the economy to a grinding halt, raising the need for the higher government spending, India's gross debt is likely to touch ₹ 170 lakh crore, which is 87.6% of the GDP, according to the SBI Ecowrap.

The report also said that the higher debt amount will shift the FRBM target of combined debt to 60 % of GDP by FY23 by seven years with the target now seen achievable in FY30 only.

"Higher level of borrowing this fiscal is likely to increase gross debt further to around ₹170 lakh crore or 87.6 % of GDP. Within this, external debt is estimated to increase to ₹ 6.8 lakh crore (3.5 % of GDP). Of the remaining domestic debt, component of State's debt is expected at 27 % of GDP," it said.

In the financial year 2019-20, India's debt stood at ₹ 146.9 lakh crore, 72.2 % of GDP, increasing from ₹ 58.8 lakh crore in FY12.

"The GDP collapse is pushing up the debt to GDP ratio by at least 4%, implying that growth rather than continued fiscal conservatism is the only mantra to get us back on track," it said.