The last nine years have seen a near trebling of central government’s debt to Rs 155.6 lakh crore, according to minister of state for finance Pankaj Chaudhary, who however termed the center’s debt profit as “safe and prudent”. The central government’s debt had been at Rs 58.6 lakh crore in 2014.
However, as a percentage of India’s gross domestic product — or the total value of goods and services produced in the country — central debt has not seen such a sharp increase. Instead, it has grown to 57.1% of the GDP as of March this year from 52.2% in 2014.
The deterioration in the central government’s debt profile runs contrary to the target of reducing central debt to 40% of India’s GDP by March 2025 under the Fiscal Responsibility and Budget Management Act, 2003.
Responding to a question by SR Parthiban in Lok Sabha, Chaudhary put most of the blame for the slippage on the COVID pandemic.
The central government’s debt had grown to Rs 105.1 lakh crore by March 2020 — at the beginning of the COVID-pandemic in India.
Over the next year, it rose by Rs 16.8 lakh crore to Rs 121.9 lakh crore by March 2021, pointed out Chaudhary.
However, over the next two years, the central government budget has further ballooned by Rs 33.7 lakh crore rupees to Rs 155.6 lakh crore.
'SAFE AND PRUDENT'
Chaudhary also added that the government’s debt was a “safe and prudent” level as most of it was owed in Indian currency.
As of March 2014, India’s external debt was worth around Rs 3.74 lakh crore, which rose to around Rs 7.49 lakh crore as of March 2023. However, Chaudhary pointed out that, as a percentage of India’s total GDP, India’s external debt fell to 2.7% from 3.3% over the same period.
The largest external lender to the country was Japan, to which India owed Rs 1.69 lakh crore as of March 2023. As of March 2014, the number was Rs 79,825 crore.
The second biggest foreign currency lender to India was the Asian Development Bank with an outstanding of Rs 1.61 lakh crore as of March this year. In 2014, India owed ADB Rs 51,469 crore.
Other major lenders to India include International Development Association (Rs 1.54 lakh crore), International Bank for Reconstruction and Development (Rs 1.36 lakh crore), Russia (Rs 25,448 crore) and Germany (Rs 22,615 crore).