The inflation elixir

From about 84 per cent of GDP in 2003, India’s public debt-to-GDP ratio has steadily declined to 67 per cent, and projections show a continuing decline. While much of the world is preoccupied with rising debt ratios, India appears to be singularly well-positioned. Or is it? Here’s the odd thing. Indian general government deficits have been consistently high, averaging about eight per cent of GDP during 2003-2008 and jumping to 9.5 per cent of GDP since 2009. India’s fiscal deficits lead in the elite league of G20 nations. The public deficits of the other BRIC countries have been consistently lower.

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