Public debt to GDP ratio

- Public debt is the total amount borrowed by the government of a country.
- In the Indian context, public debt includes the total liabilities of the central and state governments.
- The Fiscal Responsibility and Budget Management (FRBM) Review Committee Report has recommended a debt to GDP ratio of 60% for the general (combined) government by 2023, comprising 40% for the Central Government and 20% for the State Governments.
- At present, the public debt calculated as general government liabilities, which includes the liabilities of Centre and states, is 72.2% of the country’s GDP (as of FY20).
As per Reserve Bank of India Act of 1934, the Reserve Bank manages public debt on behalf of the Central and the State Governments.

These are listed as follows:
- Dated government securities or G-secs
- Treasury Bills or T-bills
- External Assistance
- Short term borrowings

Public Debt is the money owed by the Union and State governments, while private debt comprises all the loans raised by private companies, corporate sector and individuals such as home loans, auto loans, personal loans.

The International Monetary Fund (IMF) has projected that India’s public debt ratio will jump by 17 percentage points to almost 90% of India’s GDP because of an increase in public spending due to COVID-19 and the fall in tax revenue and economic activity.
It remained remarkably stable at about 70% of the GDP since 1991.
Going forward, it is projected to stabilise in 2021, before slowly declining up to the end of the projection period, in 2025. As per IMF, the pattern of public debt in India is close to the norm around the world.

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