India only major EM set to cut debt ratio by 2031: RBI DG
Why in the news
RBI Deputy Governor Poonam Gupta, speaking at the Business Standard BFSI Insight Summit on 28 October 2026, said India is set to be the only major emerging economy to lower its government debt-to-GDP ratio by 2031.
Key facts
- Only EM: among nine economies with GDP above USD 1 trillion, India is the only emerging market projected to reduce debt-to-GDP from 2025 to 2031.
- General government debt: projected to decline from 84.3% of GDP in 2025-26 to 75.1% in 2031-32.
- Growth-interest gap: nominal GDP growth of about 11% a year against an effective interest rate of about 7% on government debt.
- Capex: general government capital spending rose to 5.8% of GDP in 2025-26 from about 4% in 2019-20.
- Debt profile: mostly long-term, in rupees and held domestically, which limits refinancing risk.
IMF public debt projections (October 2026)
| Group | 2025 | 2031 |
|---|---|---|
| World | 94% | nearly 102% |
| Advanced economies | 108.2% | 115.2% |
| Emerging market and developing economies | 73.7% | 84.2% |
The IMF expects global public debt to cross 100% of GDP in 2030.
Exam angle
- Debt falls as a share of GDP when nominal growth exceeds the interest rate on debt.
- Note the figures: 84.3% (2025-26) to 75.1% (2031-32).
- Speaker: Poonam Gupta, RBI Deputy Governor.
- Source of global projections: IMF, October 2026.