India's Path to Fiscal Consolidation: Moderating Public Debt for Global Rating Upgrade

Economic Affairs Secretary Ajay Seth emphasizes the need to moderate India's elevated public debt to secure a global rating upgrade. Speaking at a public policy conference, Seth highlighted India's resilience as a nearly $4 trillion economy. He advocates for fiscal consolidation and governance improvements to enhance credit ratings and international confidence.

Economic Affairs Secretary Ajay Seth has sounded the call for India to moderate its elevated public debt, crucial for securing a much-needed upgrade from global rating agencies. Speaking at the ISAAC Centre for Public Policy Conference on Friday, Seth noted India's current status as a nearly $4 trillion economy but stressed the need for fiscal agility amid rising uncertainties.

Highlighting India's commitment to fiscal consolidation, Seth pointed out that the country's ability to withstand future crises is compromised by high interest outgo relative to tax revenues. In his view, addressing this elevated debt level is a pivotal factor that rating agencies scrutinize when assessing India's creditworthiness.

While emphasizing the path towards fiscal consolidation, Seth drew attention to rebalancing strategies that favor capital expenditure and advocated for a more objective World Governance Index. He observed that though global discussions now lean towards energy security, India remains engaged with reinforcing economic governance and credit rating improvement.

(With inputs from agencies.)