IMF report on India debt: Government says report only talks of "worst case scenario"

The Finance Ministry also highlighted that the debt of both the centre and states has come down since 2021. "General government debt has steeply declined to 81% in financial year 2023 from 88% in financial year 2021," the clarification said, adding that the centre is on track to achieve its stated fiscal consolidation aim of below 4.5% by financial year 2026.

"It is also expected that the combined government debt will decline substantially in the medium-to-long term," the statement said.

India's general government debt is majorly rupee-denominated with external borrowings contributing a minimal amount, a fact that is highlighted in the IMF report.

Domestically issued debt, which is largely in the form of government bonds, is mostly medium or long-term, with a weighted average maturity of nearly 12 years for the central government debt. "Therefore, the rollover risk is low for domestic debt, and the exposure to volatility in exchange rates tends to be on the lower end," the government added.

"The shocks experienced this century by India were global in nature, like the global financial crisis, the taper tantrum, Covid-19 among others," the Finance Ministry said, adding that these shocks uniformly affected the global economy. Therefore, any adverse global shock or extreme event is expected to unidirectionally impact all the economies in an interconnected and globalised world, the ministry said.