At a time when the US and euro zone countries are struggling to solve debt problems, India is projected to improve its debt conditions in terms of a proportion to gross domestic product (GDP) vis-à-vis other countries, which will make it an attractive destination for investments, says an industry chamber.
“In the crisis years, India better managed its debt position. India’s gross debt in GDP ratio is projected to reduce by 2.7 percentage points, from 77.7 per cent in 2007 to 75 per cent in 2011, which is concurrent with the recent global meltdown period,” the PHD chamber said.
Austerity measures have helped India improve its debt position, it said, adding Brazil, too, had shown impressive performance among BRICS nations. Its debt is projected to decline by 0.2 percentage points during 2007 to 2011.
The BRICS nations comprise five of the world’s leading developing economies — Brazil, Russia, India, China and South Africa.
However, the position of China, the fastest growing in this bloc, is projected to worsen in the same period. The gross debt-to-GDP ratio in China is estimated to increase from 19.6 per cent in 2007 to 26.9 per cent in 2011.
India’s sovereign debt is also estimated to improve in the crisis years. Its sovereign debt to GDP ratio is projected to improve from five per cent in 2007 to 4.5 per cent.
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India’s efforts to improve its debt burden are inspiring and it will enhance global investor’s confidence, going forward, the chamber said.
Ireland, Greece, Japan and the US are projected to perform poorly, with their gross debt-GDP ratio increasing by 84.3, 60.1, 45.4 and 37.7 percentage points, respectively, during the same period, the chamber said.
Since almost all the major economies are caught up in the quagmire of high debt and sluggish output growth, India may emerge as the most attractive investment destination as compared with advanced economies as well as emerging ones too, the chamber said.