It’s what economists call a debt dynamics equation. It’s actually one of the few equations in economics which actually works because it is, it’s that you look at what is this year’s opening stock of? What is your fiscal deficit, which is the incremental borrowing in the year? What is the interest rate on the previous borrowing and what is the rate of growth of the nominal GDP and what’s your primary deficit? What the key indicator there is, how much new borrowing are you doing? So if you calculate this, you can decide what is that deficit which will lead to a compression of the debt to deficit, says Dr TV Somanathan, Union Finance Secretary in conversation with Raghuvir Srinivasan, businessline Editor

Be sure to check out the other videos below,

Breakfast with BL | Union Finance Secretary Dr TV Somanathan on conservative nature of the Budget

Breakfast with BL | Union Finance Secretary Dr TV Somanathan on the long-term capital gains measure in the Budget

Breakfast with BL | Union Finance Secretary Dr TV Somanathan on the employment schemes in the Budget