India’s fiscal deficit has been a concern for years. The government’s borrowing plans are under scrutiny. With a deficit of 6.4% of GDP in 2022, the need for strategic borrowing is paramount.
Experts suggest that the government should focus on long-term borrowing to reduce the burden on future generations. This can be achieved by issuing more long-term bonds and reducing reliance on short-term borrowings. As of 2022, the government has already begun to implement such measures, with 55% of its borrowings being long-term. This shift towards fiscal prudence is expected to yield positive results in the coming years, with projected GDP growth of 7.5% by 2025.