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State of the Economy 27

Table 6: Comparison of Macroeconomic Indicators during Global
Financial Crisis, Taper Tantrum and COVID-19
Global Taper COVID-19 Pandemic
Financial Crisis Tantrum
Macroeconomic Indica- 2008-09 2012-13 2021-22
tors
CPI inflation 9.1 9.4 5.2 Apr-Dec 2021

India’s Gross Fiscal Deficit 8.3 6.9 10.2 2021-22 (BE)
as % of GDP

Fiscal Deficit of EMDEs 1.6 1.7 7.8 2021
(Asia) as % of GDP

Current Account Balance as -2.3 -4.8 -0.2 Apr-Sept 2021
% of GDP

External Debt as % of GDP 20.7 22.4 20.2 June 2021
Forex Reserves 252 292 634 31 Dec 2021
st
(US$ billion)

Govt Bond Yields 10-year 7.3 8.0 6.4 11 Jan 2022
th
Total FDI inflows 8.3 34.0 48.4 Apr-Oct 2021
(US$ billion)

SCBs Capital to Risk 13.2 13.9 16.5 Sept 2021
Weighted Assets Ratio
(CRAR)

SCBs Provision Coverage - 47.6 68.1 Sept 2021
Ratio
Source: NSO, MoSPI, RBI, CGA, CDSL, Ministry of Finance, IMF.
Note: The taper tantrum happened in 2013. In the table above, 2012-13 is used to show the position just prior to
taper tantrum as this is analogous to the present situation prior to withdrawal of liquidity in financial markets.

External sector

1.31 Despite all the disruptions caused by the global pandemic, India’s balance of payments
remained in surplus throughout the last two years (Figure 27). This allowed the Reserve
Bank of India to keep accumulating foreign exchange reserves, which stands at US$634
billion on 31 December 2021). This is equivalent to 13.2 months of imports (Figure 28)
st
and higher than the country’s external debt. As of end-November 2021, India was the fourth
largest foreign exchange reserves holder in the world after China, Japan, and Switzerland. A
sizeable accretion in reserves led to an improvement in external vulnerability indicators such as
foreign exchange reserves to total external debt, short-term debt to foreign exchange reserves,
etc.