## What Level of Public Debt Could India Target?

_IMF Working Papers, January 1, 2010_

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## Bibliographic details
- Authors: Petia Topalova, Dan Nyberg
- Published: January 1, 2010
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451961836.001

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### Objective and Scope
- Discusses possible medium-term public debt targets for India.
- Bases analysis on evidence from the economic literature on prudent levels of public debt and feasibility for the country to meet a particular target over the next 5-6 years.
- Recognizes challenges in determining an appropriate debt target.

### Main Findings and Projections
- Cross-country analysis and simulations suggest a debt ratio in the range of 60-65 percent of GDP by 2015/16 might be suitable for India.
- Such a debt ceiling:
  - Remains above the average debt level for emerging markets.
  - Is within the range of debt ratios that would provide room for countercyclical fiscal policy and contingent liabilities.
  - Would send a strong signal of the government's commitment to fiscal consolidation by making a clear break with the past.

### Policy Implications and Recommendations
- Targeting a debt ratio in the range of 60-65 percent of GDP by 2015/16 would:
  - Provide fiscal space for countercyclical policy responses.
  - Offer capacity to absorb contingent liabilities.
  - Reinforce a visible commitment to fiscal consolidation.

### Subjects and Keywords (as listed)
- Subjects: Emerging and frontier financial markets, Financial markets, Financial services, Fiscal policy, Government debt management, Public debt, Public financial management (PFM), Real interest rates
- Keywords: debt, debt ceiling, debt intolerance, debt level, debt ratio, debt target, debt threshold, Emerging and frontier financial markets, fiscal consolidation, Fiscal rules, GDP, GDP + ClubB, GDP + ClubC, GDP deflator, GDP reduction, General government debt, Global, Government debt management, India, public debt debt ratio, Real interest rates, WP

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## Content in this bundle

- **Path of India’s General Government Debt: Scenarios**
  - [Path of India’s General Government Debt: Scenarios (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2010/_wp1007.pdf.md){rel="alternate" type="text/markdown"}
  - [Path of India’s General Government Debt: Scenarios (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2010/_wp1007.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/what-level-of-public-debt-could-india-target-23511_