The Revenue Of Central Govt Has Decreased Due To Corona

The Revenue Of Central Government Has Decreased Due To Corona. The ability to deal with debt in the economy, now the debt level will be 90 percent of GDP, 85 percent in five years.

The way in which the revenue of the central government has decreased due to Corona has forced the government to take more and more loans. This situation can persist for the next two-three years.

Despite this, the debt burden situation in India will remain balanced, that is, there will be no problem regarding debt repayment. The state of the Indian economy is capable of handling debt.

The debt-to-government ratio has now reached 90 percent of the country’s GDP. But it will come down to 85 percent by the year 2026.

The RBI has said this in a recent report. However, it also states that the Government of India will have to make all efforts to increase revenue.

The RBI has said that other developing countries have also taken large loans during the Corona era. But India is in a better position than other countries.

According to RBI, the country is able to bear the increasing financial burden. In the year 2020-21, India spent 25 percent of the budgetary revenue to repay the debt.

But the good thing is that the debt outstanding in India has a maturity of more than 11 years and foreign debt accounts for only two percent of it.

This means that even in the event of sudden withdrawal of foreign investment, the country will not have much problem in repaying the debt.

India also has the ability to repay the debt in its currency in emergent circumstances. At the same time, India’s economic growth rate will be higher than the annual growth rate in the average interest payable on foreign debt.

During the first four months of the current financial year i.e. April-July 2020, there was a huge decline in revenue of the Center and States. This situation has arisen from the nationwide lockdown to curb the corona.

Because of this, the government had to borrow a lot from the market. In the General Budget 2020-21, there was a plan to borrow Rs 7 lakh crore from the market, but in reality, had to borrow Rs 12.80 lakh crore.

In the year 2021-22 too, the government has planned to take a loan of Rs 12.05 lakh crore.

According to the RBI report, only the central government’s debt level has gone up to 64.3 percent of GDP and if it is merged with the states, it has gone up to 90 percent.

However, RBI believes that the government’s debt management will be better in the future. The biggest argument for this has been that India’s economic growth rate will be very good in the coming years.