Debt Binge to Widen India’s Fiscal Gap to 13%, HSBC Says

Borrowings by India’s federal government, provinces, and state-run firms are set to cross 13% of the nation’s gross domestic product, threatening to crowd out the private sector from the debt market, according to an HSBC Holdings Plc. note.

Debt sales by these state entities may have also widened the fiscal deficit for the year ended March 31 to 10.2% of GDP from the 9% estimated by the bank before the coronavirus outbreak, HSBC economists Pranjul Bhandari and Aayushi Chaudhary wrote.