Debt Current Affairs - 2020

Status Paper on Government Debt released

On May 22, 2020, the Ministry of Finance released Status Paper on Government Debt 2018-19. According to the report, the overall debt of centres and states declined by 68.7% in March 2018 to 68.6% in 2019.

Highlights

The Status Paper on Government Debt is being produced by the Ministry of Finance since 2010. Current debt of India stands at Rs 1.3 crore crore.

Key Findings of paper

The debt of central government dropped marginally from 45.8% in 2017-18 to 45.7% in 2019, The external debt was 2.7% of GDP. The Average Interest Cost of the centre remained unchanged in the year 2018 to 2019. Around 94% of centre’s liabilities were of domestic debts.

The tenure of the longest security was 37 years.

Government Debt

The Government Debts are classified as internal debt and external debt. The Internal Debts include non-marketable and marketable debt. External debt refers to debt borrowed from all the sources outside the country.

Government Liabilities are classified into liabilities in public account and debt contracted against Consolidated Funds of India.

UNCTAD cancels 1 trillion USD debts owed by developing countries

The United Nations Conference on Trade and Development (UNCTAD) has announced that it is to cancel over 1 trillion USD of debt owed by developing countries.

Highlights

According to the UNCTAD, over 64 low-income countries spend more on debts than their health systems. They are now struggling with growing debt burden to plummet prices of oil, weakening of local currencies and exports. On the other hand, they have COVID-19 crisis to address health issues.

Key Findings

According to UNCTAD, the high-income countries have debt obligations between 2 trillion USD and 2.3 trillion USD in 2020. The middle- and low-income countries have debt obligations between 700 billion USD and 1.1 trillion USD.

G20

Similar steps were taken by the G20 countries as well. The G20 groupings agreed to suspend bilateral debt payments by the poorest countries of the world till the end of the year. The G20 grouping has called for “Global Debt Deal” that will grant one-year debt standstill. After one year, the developing world shall pay back the debt with interest.