Budget deficit financing: Country turns again to IMF after a decade

[Cheepek]

External debts are always external debts. And for India, it is a staggering $570 billion. It seems another SL is unfurling itself to become the laughing stock of all other countries.

Why do you camouflage your heavy debt burden with so many explanations that I already lost count of them? Be honest to your country that India is heavily under external debts that it cannot probably pay back.

BD is sooo different!!!! Everything is under control.

It's okay if you don't understand private and sovereign debt, but do you know how much foreign reserves is RBI sitting on?

 

[Abdul Rehman Majeed]

- India did not borrow from IMF in a long time

India does borrow but only from its own markets or from the RBI

now can we please get back to BD's IMF borrowing?

I am yet to see why BD is planning to borrow from IMF when it says its doing well economically - something isnt adding up. any BD folks here to help out? why cant BD fund the deficit internally? usually IMF funds are taken to fund external obligations (imports/paying loans) and not budget deficits.

BD and Pakistan care for their citizens while Modi could not careless if Indians die of starvation.

 

[Wood]

Very low interest rate in this high inflation period.

 

[Protest_again]

External debts are always external debts. And for India, it is a staggering $570 billion. It seems another SL is unfurling itself to become the laughing stock of all other countries.

Why do you camouflage your heavy debt burden with so many explanations that I already lost count of them? Be honest to your country that India is heavily under external debts that it cannot probably pay back.

BD is sooo different!!!! Everything is under control.

Lol. $90 billion external debt with $42 billion in reserves

$570 billion in debt (with lower interest rate) with $600 billion in reserves

Who is the fool now? Which country is heading the Srilanka way?

 

[PadmaBridge]

You don't understand the difference between sovereign and private debt? Think you are trying to be intentionally dense just to win a pointless internet spat

Problem is your “private debt” is mainly corporate debt.

These corporations have taken huge loans from state banks.

If external debts are called by the external lender - it will have a massive ripple affect on your state owned banks.

Resulting in the same or worse outcome.

 

[Protest_again]

Problem is your “private debt” is mainly corporate debt.

These corporations have taken huge loans from state banks.

If external debts are called by the external lender - it will have a massive ripple affect on your state owned banks.

Resulting in the same or worse outcome.

Lol. Why would they call? All of the corporations have better credit rating than Bangladesh and India itself. Just because you wish it too? Corporations if they can't service the loan are liquidated for its assets and paid back.

 

[mb444]

Whats the big deal.... IMF is a collective.... Bangladesh has paid in $1.5bn into the collective pot.... why should it not use the facility when it needs to.

 

[Wood]

Problem is your “private debt” is mainly corporate debt.

These corporations have taken huge loans from state banks.

If external debts are called by the external lender - it will have a massive ripple affect on your state owned banks.

Resulting in the same or worse outcome.

Corporate debt does not have the same effect as sovereign debt. If the sovereign debt is unserviceable, the country will not be able to raise new capital to finance imports as required. Corporate debt on the other hand will lead to insolvency of the corporation only. While the bad loans (issued by state banks) can lead to fiscal problems in the country, it is not something that India is new to. This past decade, there have been quite a few bad loans (from state run banks) and the effects on Indian economy are not the same as what we see in countries that default on external loans (Sri Lanka).

 

[mb444]

Lol. $90 billion external debt with $42 billion in reserves

$570 billion in debt (with lower interest rate) with $600 billion in reserves

Who is the fool now? Which country is heading the Srilanka way?

Umm... what is the link between external debt and reserves? Whilst i assume your reference to $570bn is govt debt that india carries... the $600bn reserves in its bank are not the governments money. It can not just use it without letting out hyperinflation, without junking your bond market and collapsing your economy.

Your understanding of how things are connected is inaccurate. In terms of indebtedness of countries the following graphic may assist you. Debt to reserves are meaningless... its debt to GDP that counts. Srilanka ran out of reserves because its GDP collapsed due to lack of tourism, very silly agricultural reforms and huge debt.

Lack of reserves is a symptom not the cause of srilankas problem. India is far closer to Srilanka than BD.

 

[bluesky]

You don't understand the difference between sovereign and private debt? Think you are trying to be intentionally dense just to win a pointless internet spat

Now, read below to know nowhere in the wiki reporting there is a word on privately borrowed money. Are you stupid enough not to understand the difference?​

Multilateral[edit]​

Multilateral debt is the money India owes to international financial institutions such as the Asian Development Bank (ADB), the International Development Association (IDA), the International Bank for Reconstruction and Development (IBRD), the International Fund for Agricultural Development (IFAD) and others. Borrowing from the International Monetary Fund (IMF) are not included under multilateral debt, and are instead classified separately under the IMF head. As on 31 March 2021, India had a total multilateral debt of $69.7 billion. The country's major creditors are the IDA, ADB, and IBRD. The IFAD and a few other multilateral creditors hold the remaining portion of the multilateral debt.

Bilateral[edit]​

Bilateral debt is the money India owes to foreign governments. As on 31 March 2021, India had a total bilateral debt of $31.0 billion.

Currency composition[edit]​

India's external debt is held in multiple currencies, the largest of which is the United States dollar. As on 31 March 2020, 53.7% of the country's debt was held in U.S. dollars. The rest of the debt is held in Indian rupees (31.9%), Japanese yen (5.6%), special drawing rights (4.5%), Euros (3.5%) and other currencies (0.8%).[3]

Concerns and issues[edit]​

Moody’s Investors Service upgraded India's government bond rating from Baa3 to Baa2 on 16 November 2017. In the announcement, Moody’s noted that "greater expectation of a sizeable and sustained reduction in the general government debt burden, through increased government revenues combined with a reduction in expenditures, would put positive pressure on the rating."

 

[Destranator]

The govt is advancing paperwork with IMF just as a precaution. We do not need their money at this moment. Everyone can calm down.

 

[mb444]

Problem is your “private debt” is mainly corporate debt.

These corporations have taken huge loans from state banks.

If external debts are called by the external lender - it will have a massive ripple affect on your state owned banks.

Resulting in the same or worse outcome.

BD enterprise can not borrow from international lenders by law with some very specific exemptions.

BD has strictly only borrowed from institutional lending collectives. They do not just call in loans on a whim, that simply not how it works.

However i agree with you regarding the dangers of the bad debt portfolio. BD needs to start writing these off to smooth out the impact and start taking action to realise them where possible and absolutely strengthen QA before granting more loans.

We must not incubate this issue... must be proactive to minimise this as it is hindering economic growth and compromising fiscal discipline.

 

[Wood]

Now, read below to know nowhere in the wiki reporting there is a word on privately borrowed money. Are you stupid enough not to understand the difference?​

Multilateral[edit]​

Multilateral debt is the money India owes to international financial institutions such as the Asian Development Bank (ADB), the International Development Association (IDA), the International Bank for Reconstruction and Development (IBRD), the International Fund for Agricultural Development (IFAD) and others. Borrowing from the International Monetary Fund (IMF) are not included under multilateral debt, and are instead classified separately under the IMF head. As on 31 March 2021, India had a total multilateral debt of $69.7 billion. The country's major creditors are the IDA, ADB, and IBRD. The IFAD and a few other multilateral creditors hold the remaining portion of the multilateral debt.

Bilateral[edit]​

Bilateral debt is the money India owes to foreign governments. As on 31 March 2021, India had a total bilateral debt of $31.0 billion.

Currency composition[edit]​

India's external debt is held in multiple currencies, the largest of which is the United States dollar. As on 31 March 2020, 53.7% of the country's debt was held in U.S. dollars. The rest of the debt is held in Indian rupees (31.9%), Japanese yen (5.6%), special drawing rights (4.5%), Euros (3.5%) and other currencies (0.8%).[3]

Concerns and issues[edit]​

Moody’s Investors Service upgraded India's government bond rating from Baa3 to Baa2 on 16 November 2017. In the announcement, Moody’s noted that "greater expectation of a sizeable and sustained reduction in the general government debt burden, through increased government revenues combined with a reduction in expenditures, would put positive pressure on the rating."

Do you even read what you copy paste? Indian members have said that sovereign external debt is $100 billion for India. The debt figures in your wiki excerpt also adds up to $100 billion only. Why should it say private when there is no private debt included in this number? I don't understand what you are trying prove? That you don't read what you post?!

 

[mb444]

The govt is advancing paperwork with IMF just as a precaution. We do not need their money at this moment. Everyone can calm down.

Even if we need it, why is this an issue.... why are we part of the IMF, why have we paid into the pot, if never to use it.

I dont see the concern here at all. IMF is cheap source of fund... do people want us to borrow from more expensive sources?

Do you even read what you copy paste? Indian members have said that sovereign external debt is $100 billion for India. The debt figures in your wiki excerpt also adds up to $100 billion only. Why should it say private when there is no private debt included in this number? I don't understand what you are trying prove? That you don't read what you post?!

Careful dude... you are risking your sanity talking to this nut...

Indian debt is way more than $100bn accourding to times of india... but here people are mixing up a lot of things.

Neither india nor BD is facing the challenges that has beset srilanka.


https://www.google.com/amp/s/m.time...lained-in-charts/amp_articleshow/85040150.cms

 

[bluesky]

Do you even read what you copy paste? Indian members have said that sovereign external debt is $100 billion for India. The debt figures in your wiki excerpt also adds up to $100 billion only. Why should it say private when there is no private debt included in this number? I don't understand what you are trying prove? That you don't read what you post?!

Now, talk to wiki that you Indians want to escape from the reality of $570 billion in debts by writing a few solace words like private borrowing.

I do not see wiki writing any private borrowing. Please send us some links to make us see these invisible borrowinags.

Why do you insist on a fake information. India ko bara bajnewala Jain.