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Growth of India’s public debt

Year (end- march) (RS CRORE)

1986-87 1990-91 2017-18

1. Internal debt 86312 154004 6424917

Of which

Market loans 40832 70520 5062881

Treasury bills 19876 6953 2144203

182/364-day treasury bills 0.0 1,078 227842

2. Small savings, deposits 30230 61771 978966

And provident funds

3. Other accounts 14698 45336 360046

4. Reserve funds and deposits 15006 21922 225614

External debt 36578 66314 410526

Public debt 122890 220318 6835443

(Internal +external debt)

Internal liabilities 146247 283033 7799545

(1+2+3+4)

Total liabilities 182825 349347 8400071

(Internal liabilities+ external debt)

 

�Source: RBI handbook of statistics on Indian economy 2016-17(Mumbai, 2017), table 119, p 187

 

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Outstanding liabilities of the state govts.

  • Year (end- march) (RS CRORE)
  • 1985-86 1990-91 2017-18
  • 1. Internal debt (a to e) 8,049 19,274 30,64,982
  • A. market loans 6,104 15,652 22,01,051
  • b.compensation and
  • other bonds 41 60 2,23,801
  • C. ways and means
  • Advances from RBI 286 1,050 1,006
  • D. loans from banks and
  • Other financial institutions 1,618 2,513 1,62,719
  • E. special securities
  • Issued to NSSF - - 4,76,404
  • 2. Loans and advances from
  • the central govt. 38,786 73,521 1,65,220
  • 3. Provident funds etc. 6,825 16,861 1,65,220
  • Of which:
  • State provident funds 5,743 14,002 3,58,706
  • 4. Reserve funds 2,036 4,734 82,257
  • 5. Deposits and advances 5,244 12,769 3,19.118
  • 6. Contingency funds 415 995 4,501
  • 7. Total liabilities (1 to 6) 61,355 1,28,155 40,22,082
  • Source: RBI handbook of statistics on Indian economy 2017-18 (Mumbai, 2018), table 114, p 179

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  • Combined debt of central and state govts.

The debt GDP ratio increased considerably from 47.9 per cent in 1980-81 to 68.8 percent in 190-91 and further to as high as 83.2 per cent at end- march 2004. Thereafter, it started declining and stood at 71.4 percent in 2007-08. However, because of economic slowdown in 2008-09, the govt. was forced to adopt fiscal stimulus packages and this pushed up the debt – GDP ratio to 72.2 per cent. Thereafter debt-GDP ratio again started a downward trend. In 2017- 18, the debt-GDP ratio was estimated at 68.9 percent. However, some economists have opined that this ratio is on higher side and serious efforts are required to rein in the public debt. This would require efforts to control public expenditure on the one hand, and increase revenues on the other hand.

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Growth of public debt in India

Since the introduction of planning in India, there has been a rapid increase in GOI, indebtedness (in all major categories). From less than 30% of our GDP in March 1951, it shot up to region of 40-41% by the end of March 2016.This has been the case in spite of the restrictions imposed by the rules of FRBM act, and recent revenue boost on account of reforms in indirect taxation. Growth rate of revenue receipts has increased on several counts including higher growth rate of the economy and revenue receipts has increased on several counts including higher growth rate of the economy a broader coverage of the tax system and inflation. Introduction of service tax has been major contributory factor in this uptrend, which received a further push in the form of a higher basic rate and a shift towards the concept of negative list in the budget 2012-13. It is believed that the introduction of GST would give it another big push.

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