Growth on track; mind public debt: World Bank chief economist Indermit Gill
budget will help keep its growth outlook healthy, said World Bank chief economist Indermit Gill, flagging the reduction in public debt as a key focus area for the government, along with putting education in mission mode. He noted that India has done a good job of making sure the fiscal deficit is reduced from last year.
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“The budget will help keep the growth outlook healthy,” Singh told ET, when asked if the first full budget of the new government had done enough to boost growth, and if the bank would revise its FY25 projection. A month ago, the World Bank pushed up India’s growth forecast for the current financial year to 6.6%, from 6.4% estimated in January.
“I think it (fiscal deficit) should be brought down even more next year,” Gill said. “The government now needs to keep an eye on public debt. That comes from previous accumulated fiscal deficits and higher cost of financing debt.”
The July 23 budget pegged the fiscal deficit at 4.9% of GDP, on course to the targeted 4.5% by FY26.
Gill pointed out that India’s gross financing needs for 2024 are nearly the same as those of South Africa and Brazil, in terms of share of GDP. This wasn’t a good thing, he said, adding, “A higher cost of financing that public debt means that much less financing for the private sector.”
Indeed, finance minister Nirmala Sitharaman has said debt will be
