Latest news with #B.V.R.Subrahmanyam
Indian Express
2 days ago
- Business
- Indian Express
Top 10 Indian states and UTs with the highest debt-to-GDP ratios in FY 2025–26
Top Indian States/UTs by debt-to-GDP ratio FY 2025–26: India is currently the fastest-growing large economy in the world. Recently, it surpassed Japan to become the fourth-largest economy globally and is projected to overtake Germany within the next 2.5 to 3 years, according to NITI Aayog CEO B.V.R. Subrahmanyam. While the Indian economy is growing and thriving, the recent IMF and Fiscal Monitor debt-at-risk analysis revealed that the country's debt-to-GDP ratio is 80.4% globally. Indian central government, in a significant shift, has recently outlined a transition to using the debt-GDP ratio as the fiscal anchor from the 2026-27 financial year, as it aims for a decreasing debt-GDP ratio of 50±1 per cent by March 31, 2031. According to the report, Jammu and Kashmir leads the list with 51% debt-to-GDP, the highest among all states. It is followed by Arunachal Pradesh, a relatively small state economy, having an exceptionally high fiscal deficit (8.9%). Notably, the northeastern states of India—Nagaland, Mizoram, Sikkim, and Meghalaya—feature prominently in the list, showing structural fiscal imbalances driven by economic disparities, limited industrialisation, rugged terrain, and sparse population. On the contrary, Odisha tops the list with the lowest debt-to-GDP ratio (12.7%), reflecting strong fiscal discipline, good revenue mobilisation from mining and the growing manufacturing sector, and effective expenditure control. The largest states in terms of GDP—Maharashtra (18.4%), Gujarat (15.3%), Karnataka (24.9%) and Tamil Nadu (26.1%)—have maintained moderate debt levels with sustainable fiscal policies. Source: GDP and debt-to-GDP figures are based on 2025–26 budget estimates, sourced from PRS Legislative Research and compiled by Forbes India. Note: The debt-to-GDP ratio is a crucial economic metric for assessing a country or state's ability to manage its debt and overall economic health. High ratios could indicate long-term fiscal issues, constrain development investment, and raise concerns about debt sustainability. Methodology: The debt-to-GDP ratio of Indian states is derived by dividing the total outstanding debt of a state by its GDP and multiplying by 100 to get a percentage. Here is the formula: The debt-to-GDP ratio for states is calculated as (total state debt/state GDP) * 100. Cherry Gupta is an Assistant Manager - Content at The Indian Express. She is responsible for crafting compelling narratives, uncovering the latest news and developments, and driving engaging content based on data and trends to boost website traffic and audience engagement. One can connect with her on LinkedIn or by mail at ... Read More
Mint
4 days ago
- Business
- Mint
India's growth and urban planning: On different planets
Metro stations in Athens are like archaeological museums, featuring pottery shards and other artefacts discovered during excavations. Moscow's subway stops are like art galleries, grandiose and distinctive, adorned with ornate chandeliers and striking murals. Mumbai's recently inaugurated mid-town metro station, in contrast, turned into a water-world on 26 May, with the season's first downpour flooding its concourse and platforms. This embarrassing incident symbolizes problems with India's haphazard urbanization and its official approach to infrastructure build-up. More critically, it highlights laxity in recognizing the effects of climate change. Also Read: Seven reform pathways to bridge India's urban investment gaps What made the incident doubly disconcerting were proclamations by Niti Aayog CEO B.V.R. Subrahmanyam that the Indian economy had become the world's fourth-largest. The incongruity between that statement and the lived experience of Mumbai commuters and Indians coping with sub-par infrastructure elsewhere was striking. Yet, there was a common link between that statement and the flooding episode: Subrahmanyam seemed to have jumped the gun (we'll know if the Indian economy has overtaken Japan's only once the current year is over), a precipitate action like the metro station being pressed into service before it was made rain-proof. The episode also underscored the death of irony: officials attributed the flood to untimely monsoon downpours despite common knowledge that a coastal city like Mumbai witnesses heavy rainfall for four months every year. But it is not just Mumbai. The previous day saw Delhi reeling under the season's first cloudburst, with streets and underpasses flooded. A few days earlier, unseasonal May rainfall flooded large parts of Bengaluru's extended city, damaging property and causing large-scale economic losses. City after city in India suffers from the same problems every year, and yet the political or administrative classes seem either helpless in solving such well-known problems or incapable of preventing their recurrence. Also Read: Urban renewal: Indian cities need a governance overhaul It is also a fact that climate change has altered weather patterns, but authorities do not seem to have taken this into their calculations. Mumbai's monsoons, for example, are getting increasingly erratic in terms of both timing and precipitation. Yet, infrastructure projects—whether it is roads or metro station walls—routinely fail to take this into account. This anomaly sits uneasily with India's growing urbanization: about 40% of the population lives in urban areas, with many experts claiming that the number may be closer to 50% or even higher. This data uncertainty has arisen because a large section of the urban population resides in informal shelters, invisible to the formal gaze but most vulnerable to urban failures. Every city depends on this section for the delivery of multiple services, but is typically blind to their income, education, housing or health needs. Worse, they are not covered by any labour laws and usually do not have any rights. In the triangulation between various interest groups in an urban settlement—the entrepreneurial class and those employed in the formal sector, the political class, bureaucrats, municipal authorities and real estate developers—this section usually gets the short end of the stick. With little or no access to water, waste collection mechanisms, modern sanitation systems or health facilities, this cohort suffers the harshest impact of climate change and extreme weather events. Yet, the country's big-budget urban build-up seems to ignore their needs. Also Read: Urban renewal: Indian cities need a governance overhaul A Niti Aayog report titled Urban Planning Capacity in India ascribes the continuing urbanization crisis to a lack of urban planning. 'For this reason, as the state and city governments continue to solve urban issues in a firefighting mode, urban areas struggle to achieve 'basic services for all'… India's urban story may be lauded globally or suffer irreversible damages in the next 10-15 years depending on corrective policy measures and actions taken at the beginning of this decade." Written in September 2021, the lack of any remedial action since then is already manifesting itself across multiple malfunctions, collapses and avoidable disasters. The report also points to a lack of qualified urban planners in the state planning machinery: against 12,000 town planners required at all levels then, there were less than 4,000 sanctioned posts, with half of those lying vacant. What the report fails to mention, though, is that state governments have largely outsourced urban planning to real-estate developers and infrastructure contractors. Projects are designed, finalized and executed based on interests divergent from user interests. This was amply evident in Mumbai over the past 36 months after the city's municipal corporation, under guidance from the state government instead of formal urban governance structures, unleashed multiple construction projects that choked city traffic and worsened air quality. The Smart Cities mission was conceived about 10 years ago, though there is still little clarity about what makes cities 'smart' and whether any city has actually become any smarter. Problems of urbanization in India have also been well documented along with solutions. The smart thing would be to implement some of those suggestions immediately, especially those that will make cities not only more empathetic, but also more resilient to economic downturns and extreme weather events. The author is a senior journalist and author of 'Slip, Stitch and Stumble: The Untold Story of India's Financial Sector Reforms' @rajrishisinghal
The Wire
27-05-2025
- Business
- The Wire
Has India Really Become the Fourth-Largest Economy? Five Reasons to Ask
India has become the fourth-largest economy in the world, as per the NITI Aayog CEO, B.V.R. Subrahmanyam. He clarified that this is based on projections for 2025-26 made by the International Monetary Fund (IMF) in its World Economic Outlook, which says that India's nominal GDP is projected to rise to USD 4,187.017 billion, surpassing Japan's estimated USD 4,186.431 billion. If this is correct, then it is something to be happy about, even if India will be ahead by USD 0.586 billion, 0.014% of GDP. Forget that India's per capita income is one-thirteenth of Japan's in nominal dollars; several other factors also need to be taken into account. First, why is the IMF projection being used? The IMF is not a data-gathering agency. It uses government data and tweaks it. So, errors in government data are also in the IMF data. Since Indian GDP data has big errors, as pointed out in this article, how reliable is this projection? Basing the claim on the IMF projection is an attempt to gain credibility and avoid the criticism that Indian GDP data is erroneous. Second , the world economy is passing through huge uncertainty since the victory of US President Donald Trump in November 2024. More so since he threatened to levy stiff protectionist tariffs soon after taking over as President. This threatens both inflation, due to supply disruptions, and recession, due to a decline in exports. Uncertainty and stock market turmoil have impacted currencies, gold prices, interest rates, investments and growth prospects. So, which economy would be impacted by how much is unclear. Thus, projecting growth rates is fraught. A projected 0.014% difference in GDP can easily turn out to be incorrect. In the past, too, IMF projections have proved to be incorrect. For instance, the IMF stuck to its projection for positive growth in 2008, during the global financial crisis, till the Lehman moment in September 2008. By then, the world economy had entered recession. It was then said that the experts were behind the curve. Again, the IMF has decided not to factor in the likely impact of President Trump's threat of tariffs and the possibility of a tariff war. This is possibly so as not to spook the markets by giving negative news. But, then, IMF projections are not realistic and cannot be relied upon. Third, GDP for a given year is estimated using various databases for each of its components, and the data becomes final with a lag. There are the first advance estimate and second advance estimate based on partial data available during the year. Next, the revised estimate is announced after the year closes, and finally, after another gap, the final estimate is announced. So, finality about the GDP comes two years later. For example, in the latest GDP data announced on February 28, 2025, the data was given for the second advance estimate for 2024-25 (the running year), revised estimate for 2023-24 (previous year) and final estimate for 2022-23 (two years earlier). So, only in 2027 would it be clear if India surpassed Japan's GDP in 2025. Fourth, the Indian economy has gone through four shocks since 2016-17 when demonetisation was announced. There was GST in 2017, the NBFC crisis in 2018 and a sudden lockdown in 2020. Given that GDP estimation is also based on projection from the previous year and using a benchmark from the reference year in the past, a shock would foul up this method. It is likely to lead to an overestimation of GDP. For instance, in 2016-17, demonetisation caused markets to be empty, fruits and vegetables to rot in the fields, industries to close down, and yet, official data showed an above 8% growth for the year, instead of a negative growth. A recent article points out that prior to 2016-17, the 'discrepancy' in GDP was small, but subsequently it has become large and unstable, swinging from positive to negative. It is also pointed out that officially, the 'production side approach' to measuring GDP is taken as the more reliable one. But it also has big errors due to the nature of the shocks experienced. Finally, the shocks have led to errors in the methodology used to measure the different components of GDP. Every sector of the economy has a private and a public component. The public sector is entirely organised. The private sector has an organised and an unorganised component. The data for the latter comes with a delay. In fact, for most of the quarterly GDP estimates, only limited organised sector data are available. So, estimates for the unorganised component of a sector are generated using the organised sector as a proxy. Effectively, India's official GDP is largely estimated using the organised sector data. This was possibly alright till the shock of demonetisation and subsequent shocks. But since demonetisation, the unorganised sector, which was badly impacted, has been declining. The other three shocks also damaged this sector. Evidence for this decline has come from trade, leather goods, pressure cookers, luggage, etc. The organised component has been growing at the expense of the unorganised component. Effectively, the declining unorganised sector is proxied by the growing organised sector. Agriculture is a large part of the unorganised sector, and its data comes routinely during every crop season. But, experts have been questioning the correctness of the official data. A corollary of the decline of the unorganised sector is the aggravation of unemployment in India. If this sector were growing at anywhere like 6% per annum, the problem would not persist. The organised sector is getting increasingly automated and generates little employment. So, when it grows at the expense of the unorganised sector, it creates unemployment. In brief, there is a need to reassess the claim that India's GDP is growing fast and will cross that of Japan in 2025. Arun Kumar is a retired professor of economics at JNU. He is the author of 'Indian Economy's Greatest Crisis: Impact of the Coronavirus and the Road Ahead'. 2020.
Daily Tribune
26-05-2025
- Business
- Daily Tribune
India Overtakes Japan to Become World's Fourth-Largest Economy,
India has officially overtaken Japan to become the fourth-largest economy in the world, according to NITI Aayog CEO B.V.R. Subrahmanyam, citing data from the International Monetary Fund (IMF). Speaking at a press conference following the 10th NITI Aayog Governing Council Meeting, Subrahmanyam confirmed that India's nominal GDP has crossed the $4 trillion mark, pushing it ahead of Japan. 'We are the fourth-largest economy as I speak. We are a USD 4 trillion economy, and this is not my data—it's IMF data. India today is larger than Japan,' Subrahmanyam said. According to the IMF's World Economic Outlook report released earlier this month, India's GDP is projected to reach $4.187 trillion in 2025, narrowly surpassing Japan's estimated $4.186 trillion. Only the United States, China, and Germany now stand ahead of India in global economic rankings. Looking ahead, India is poised to surpass Germany and become the world's third-largest economy within the next 2.5 to 3 years if it maintains its current trajectory. The IMF projects India's GDP will climb to $5.58 trillion by 2028, outpacing Germany's projected $5.25 trillion. India continues to be the fastest-growing major economy globally and is expected to maintain a growth rate above 6% over the next two years — the only major economy to do so. In contrast, both Germany and Japan are forecast to experience sluggish growth due to the ongoing global trade war. Germany is expected to see no GDP growth in 2025 and only 0.9% in 2026, while Japan's economy is projected to grow at a modest 0.6% in both years. Meanwhile, the United States remains the world's largest economy, with its GDP expected to reach $30.5 trillion in 2025, followed by China at $19.2 trillion. However, both economies are predicted to witness slower growth, with the U.S. expected to grow at 1.8% in 2025 and 1.7% in 2026. Among other global projections, the Euro Area is forecast to grow by just 0.8% in 2025, recovering slightly to 1.2% in 2026. France's growth is expected to hover between 0.6% and 1%, while the UK is projected to expand by 1.1% and 1.4% in those respective years. Spain is forecast to outperform most European peers with 2.5% growth in 2025, slowing to 1.8% in 2026. India's economic surge not only reflects its robust domestic growth but also signals a shift in global economic power toward emerging markets in Asia. With continued momentum, India is on course to claim its place among the world's top three economies by the end of this decade.
Hans India
25-05-2025
- Business
- Hans India
India replaces Japan as world's 4th largest economy, poised to overtake Germany for 3rd rank
New Delhi: India has surpassed Japan to become the world's fourth-largest economy and is now poised to displace Germany from the third rank in the next 2.5 to 3 years, said NITI Aayog Chief Executive Officer (CEO) B.V.R. Subrahmanyam. 'We are the fourth largest economy as I speak. We are a USD 4 trillion economy as I speak, and this is not my data. This is IMF data. India today is larger than Japan," said Subrahmanyam at a press conference of the 10th NITI Aayog Governing Council Meeting. "It's only the United States, China, and Germany which are larger, and if we stick to, you know, what is being planned, what is being thought through, it's a matter of another 2, 2.5 to 3 years; we would become the third largest economy,' Subrahmanyam pointed out. The IMF had stated earlier this month in the World Economic Outlook report that India is poised to become the world's fourth-largest economy in 2025, with the country's nominal GDP rising to $4,187.017 billion to surpass Japan's GDP pegged at $4,186.431 billion. According to the report, India continues to remain the world's fastest-growing major economy and the only country expected to clock over 6 per cent growth in the next two years. The high rate of growth will see India's GDP increasing to $5,584.476 billion in 2028 as it overtakes Germany to become the third-largest economy. The IMF has projected a zero growth rate for Germany in 2025, followed by 0.9 per cent in 2026 as it is expected to be hit the hardest among the European countries due to the ongoing global trade war. Germany's GDP is projected at $5,251.928 billion in 2028. Japan, on the other hand, is expected to be hard hit by the global trade war, with its growth stagnating at 0.6 per cent for 2025 and 2026. The GDP of the US, the world's largest economy, has been pegged at $30,507.217 billion for 2025, while that of China, the second biggest, is $19,231.705 billion. The US, which has triggered the tariff turmoil across the globe, is expected to see its GDP growth slowing to 1.8 per cent this year, which is expected to decline further to 1.7 per cent in 2026, according to the IMF report. Similarly, the Euro Area is forecast to slow to a mere 0.8 per cent growth rate in 2025 before it makes a mild recovery at 1.2 per cent in 2026. France is predicted to post a 0.6 per cent and 1 per cent growth for the two years, respectively. Spain is expected to do better than the other in 2025 as the only European country to clock a 2.5 per cent growth rate. However, it is expected to slow down to 1.8 per cent in 2026. The UK is expected to post a 1.1 and 1.4 per cent growth respectively for the two years.
