New Delhi, Aug 28
The starting point of India's macro balance sheet is positively positioned, underpinned by a robust macro-stability framework (fiscal consolidation and flexible inflation targeting framework), productivity enhancing policy reforms, and favourable structural factors such as demographics, that lend support to the growth trajectory, a Morgan Stanley report said on Thursday.
The report expects growth to average 6.5 per cent in the next 10 years, with inflation likely to align with the RBI's target of 4 per cent, thus providing a favourable backdrop to the cost of capital and ensuring debt sustainability.
"India's overall indebtedness levels reflect an incipient inflexion with a rise in private sector leverage. We expect private sector debt to continue to see modest expansion while public sector debt decline keeps overall debt manageable and improves the productivity of incremental debt," said the report.