Debt to GDP #finance #casestudy #viral #shorts #india #gdp #debt

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Debt to GDP #finance #casestudy #viral #shorts #india #gdp #debt

The debt-to-GDP ratio of Indian states is calculated by dividing the total outstanding debt of a specific state by its Gross Domestic Product (GDP) and multiplying by 100 to express it as a percentage. Here's the formula: Debt-to-GDP Ratio for States = (Total State Debt / State GDP) * 100

Indian states with a high debt-to-GDP ratio include Arunachal Pradesh at the top, followed by Punjab, Nagaland, Manipur and Meghalaya. The North-Eastern states have high Debt-To-GDP ratios as they tend to suffer from economic disparities, limited industrialisation, rugged terrain and sparse population.

Conversely, the states in India that have low debt-to-GDP ratios include Odisha at the top, followed by Gujarat, Maharashtra and Karnataka.

A high debt-to-GDP ratio signifies a state's debt burden is substantial compared to its economic output. This indicates financial vulnerability and reduced fiscal flexibility. High debt levels can increase interest payments, crowding out other critical expenditures like healthcare and education. It may also raise concerns among investors and credit rating agencies, resulting in higher borrowing costs.
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