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| Impact of rising debt on the economy | | |
Prof. Vivek Singh
Many articles are being written on the Indian economy. The Indian economy is strong. There has been a slight increase in public debt. This growth is not alarming at all. This is natural. Indian economy is progressing towards an economic superpower.
India had a public debt of ₹24.62 lakh crore in the year 1951. ₹9462265 lakh crores was the total liability of the Government of India in March 2020. There has been a slight increase. The total liabilities of the central government increased to ₹10135600 lakh crore by June 2020.
India had external debt of $85 billion in 1991, which increased to $317 billion in 2011. India had a foreign debt of about $558 billion in March 2020. External debt on the country declined by $3.9 billion to $554 billion in June 2020.
The good thing for India is that India relies more on internal debt and less on external debt. Due to this policy of India, about 20% of the total debt is external debt and the remaining 80% is internal debt. This is the reason why India's financial position is strong despite the Corona pandemic.
Debt pressure is mounting on all the states in the country. By March 2020, there was a total debt of about ₹40 lakh crore on all the states of the country. I think that by March 2021, there could be a debt of up to ₹60 lakh crore on all states.
Recent care rating data shows that almost all states of the country have debt of millions of crores of rupees. There is total debt of ₹6.02 lakh crore on Uttar Pradesh, Maharashtra ₹5.02 lakh crore, West Bengal ₹4.37 lakh crore, Tamil Nadu ₹4.04 lakh crore, Rajasthan ₹3.43 lakh crore, Andhra Pradesh ₹3.41 lakh crore, Gujarat ₹3.26 lakh crore, Karnataka ₹3.17 lakh crore There is a debt of Rs ₹2.66 lakh crore on Kerala, Madhya Pradesh ₹2.34 lakh crore, Punjab ₹2.30 lakh crore, Telangana ₹1.68 lakh crore and Orissa ₹1.33 lakh crore.
In this context, per capita debt varies as per total debt in states. Per capita debt for the residents of Punjab is ₹82771, Haryana ₹81287, Kerala ₹79771, Tamil Nadu ₹56134, Gujarat ₹53931, Karnataka ₹51981, West Bengal ₹47881, Maharashtra ₹44734, Madhya Pradesh ₹32354 and of Uttar Pradesh is ₹30136.
There has been a slight increase in debt on the country and all the states. It was necessary to take loans. This will not have any adverse impact on the economy but will increase productivity. The country will develop. The people of the country will get relief. In view of the Corona pandemic, the central and state governments had to incur additional debt. This decision was taken keeping in mind the public interest, which is absolutely appropriate. It should be praised.
India has always been more dependent on internal debt. India's dependence on external debt has been low. The concern is only when the public debt of any country exceeds 77% of GDP. At present, the situation in India is much better because the total public debt of India is equal to about 71% of the GDP. That too when there is a terrible pandemic like COVID19 in the country.
I would like to remind that in the year 2003, the public debt in the country was equal to 84.2% of GDP. Despite the Covid19 pandemic, the country's public debt today is only 71% of GDP. We are in a better position.
If we look at other countries of the world, we will find that Japan's public debt is equal to 240% of GDP. America's public debt is equal to 107% of its GDP.
India today is also in a very good position in terms of external debt. External debt on India is equal to 21% of GDP. France's external debt is 277% of its GDP, Germany's 153% and Japan's external debt is equal to 94% of GDP.
There is no need to worry about the financial situation and debt. The country's economic situation is constantly improving.
The economic recovery is clearly visible in the figures. I have written about it in some of my previous articles. After having COVID19 vaccine in the coming few months, the country's economic condition will continue to improve further. India is on the verge of becoming an economic superpower. |
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