Why India must chance raising debt despite risk of a sovereign downgrade

Vast attention to debt by rating agencies may be exaggerated, as every key economy is borrowing heavily. It is the pace of post-pandemic economic recovery that will interest foreign investors

There is no doubt the finance ministry will be worried about the size of the national debt relative to GDP that India will run up in doling out support to different segments of the economy. It is not a worry about growth slump or the phrase “secular stagnation” made famous by former US treasury secretary, Larry Summers. It is about “expecting the emerging markets to copy mechanically what the developed economies can do”, as Sajjid Chinoy perceptibly commented at an NCAER event, in April last week. 

The ministry has reasons to be worried since this metric has, of late, often