“Overall, taking all things into account, including oil price risk, I think the external situation is manageable, of course in the tense moments ahead,” he said, speaking at an event organized by the National Council of Applied Economic Research. (NCAER) here.
He added that it was better to focus on medium-term opportunities and what the nation has in store for the next six years to 2030, taking into account all the short-term unknowns.
“The medium-term growth outlook is actually constructive simply because we have paid our growth dues in the last decade and this was because we had to make balance sheet repairs in the financial and non-financial sectors. Fortunately, we are facing global shocks with a much better balance sheet for households, businesses and the financial sector,” he added.
According to Nageswaran, the high debt-to-GDP ratio is manageable because India’s macroeconomic fundamentals are sound. India’s borrowing costs are lower than those of sovereigns rated stronger than India, he argued, even in the current global turmoil.
“The yield on Indian bonds has not really risen. It is doing better than countries with better credit ratings than India. It tells us a bit about the overall macroeconomic stability that prevails in the current situation, he said.