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Poll: India Likely to Borrow Record $198B in FY 2023-24

Last updated Jan 23, 2023

Image credit: PTI [via Zee Business]

Facts

Economists polled by Reuters predict that the Indian government will borrow a record ₹16T ($198B) in the fiscal year 2023-24 — unanimously stating infrastructure spending and fiscal discipline must be India's most significant budget priority.^[1]
Though predictions range between ₹14.8T and ₹17.2T, the median forecast of 43 economists estimates 2023-24's gross borrowing would still be the highest on record. In FY 2022-23, the country borrowed an estimated ₹14.2T.^[2]
This comes two weeks after India's chief economic advisor asserted that the country, whose GDP is currently $3.4T, will become a $7T economy by 2030.^[3]
The Indian government's ability to cut borrowing in the near term is expected to be limited due to a fall in tax revenue and slow economic growth, while its debt has more than doubled what it was before the COVID pandemic.^[4]
Last month, the International Monetary Fund said that India needed a more ambitious plan for fiscal consolidation to ensure debt, which is equal to 83% of annual GDP, would be sustainable in the medium term.^[5]
The Feb. 1 budget will be the last completely developed before national elections in 2024 and several state elections that will be key tests for the ruling Bharatiya Janata Party (BJP).^[4]

Sources

[1] Reuters [2] ThePrint [3] The Hindu BusinessLine [4] ETTelecom [5] Cnbctv18

Spin

Pro-establishment narrative

While the Indian economy may be slowing, it is growing above consensus estimates. Under PM Modi’s leadership, India is set to be the second-fastest growing economy in the G20 in FY 2022/23. As global manufacturers are looking beyond China, India is stepping up to seize the moment and is getting closer to finally meeting its economic potential.

The global economy needs a new powerhouse. India is stepping up

ETTelecomJan 23, 2023Jan 23, 2023

Establishment-critical narrative

Even before COVID struck, India's financial sector was going through tough times. The current overview of the Indian economy is rather grim, as bad debt and rising interest rates are expected to hinder India's economic recovery. There's an urgent need for course correction, or the worsening global crises will soon bring more hardships for India's citizens.