Editor
New Delhi: The Indian National Congress has demanded a white paper on India's debt, alleging that it has surged to a staggering Rs 155 lakh crore under the leadership of Prime Minister Narendra Modi. Congress spokesperson Supriya Shrinate raised concerns about the escalating debt and called for transparency regarding the country's economic situation.
Since assuming office in May 2014, Prime Minister Modi's government has witnessed a significant increase in India's debt, according to Congress claims. Shrinate stated that over 100 lakh crore has been added to the debt during this period, marking a substantial rise from the 55 lakh crore debt accumulated in the first 66 years of India's existence.
The Congress spokesperson highlighted the widening debt-to-GDP ratio, indicating the government's growing debt burden. Data shows that India's general government debt, including both the central and state governments, stood at 67.1% of GDP in FY14. However, due to the impact of the COVID-19 pandemic, it surged to 88.5% in FY21 before declining to 83.1% in FY23. The International Monetary Fund (IMF) has projected India's debt-to-GDP ratio to remain around 83.6% until FY28.
Not only has India's debt increased, but the country's tax collection has also witnessed significant growth. Tax revenue as a percentage of GDP rose from 49.9% in FY14 to 55.2% by September 2022, indicating an increased effort by the government to generate revenue. However, Congress expressed concerns about the rising debt-to-tax ratio, which has expanded from 39.2% in FY14 to 61.8% in recent years.
Furthermore, India's debt compared to other G-20 nations has also risen. The core debt of the government sector in G-20 countries increased from 76.1% to 89.2%, while emerging economies experienced a surge from 39.2% to 61.8%. These figures emphasize the need for the government to address the mounting debt concerns and explore strategies to mitigate the risks associated with it.
In response to the situation, the central government has reportedly initiated discussions with global credit rating agencies to improve India's sovereign credit rating. This move aims to decrease interest rates and ensure a more stable financial environment. The government mainly borrows through the issuance of government securities called G-secs and Treasury Bills, and these borrowings are recorded as capital receipts in the Budget document.
The demand for a white paper by the Congress underscores the need for transparency and accountability regarding India's debt situation. It is expected that the government will address these concerns and provide detailed information to the public, shedding light on the steps being taken to manage and reduce the escalating debt burden.
Disclaimer: This article is based on the claims made by the Congress party and should be viewed as their perspective on the matter.