How much debt does India have in 2023?

 

How much debt does India have in 2023?

India is one of the most indebted countries in the world. According to the World Bank, India's external debt at the end of June 2023 was $629.1 billion. This represents 18.6% of India's GDP.Current statistics on India's debt.Composition of India's debt.Impact.Impact of India's debt.

It is important to note that India's debt levels are still relatively low compared to other developed countries. For example, the debt-to-GDP ratio of Japan is 262.7%, and the debt-to-GDP ratio of the United States is 128.2%.

India's internal debt at the end of March 2023 was Rs 155.6 lakh crore ($1.85 trillion). This represents 57.1% of India's GDP.

Current statistics on India's debt

The following table shows the current statistics on India's debt:

Type of debt	Amount (in $ billion)	Percentage of GDP
External debt	629.1	18.6
Internal debt	1,850	57.1
Total debt	2,479.1	75.7

Composition of India's debt

The composition of India's debt is as follows:

• External debt: India's external debt is primarily composed of commercial borrowings (52.4%), multilateral borrowings (22.9%), and short-term debt (12.2%).
• Internal debt: India's internal debt is primarily composed of government securities (78.4%), loans from banks and financial institutions (15.2%), and small savings (6.4%).

Impact of India's debt

India's high debt levels have a number of negative impacts on the economy.

• High interest payments: The Indian government has to pay a significant amount of interest on its debt. In 2022–23, the Indian government spent Rs 8.31 lakh crore ($103.9 billion) on interest payments. This is a major burden on the government's finances.
• Crowding out of private investment: The Indian government's borrowing from the domestic financial market can crowd out private investment. This is because the government is competing with the private sector for funds.
• Vulnerability to external shocks: India's high external debt levels make the economy vulnerable to external shocks, such as a rise in interest rates in the global economy or a depreciation of the rupee.

Conclusion

India's high debt levels are a major concern. The government needs to take steps to reduce its debt levels over time. This can be done by reducing fiscal deficits, increasing tax revenues, and improving public asset management.

Additional information:

• The Indian government has set a target of reducing its fiscal deficit to 3% of GDP by 2024–25.
• The government is also taking steps to increase tax revenues by expanding the tax base and simplifying the tax regime.
• The government is also improving public asset management by selling non-core assets and improving the performance of public sector enterprises.

Overall, India's debt levels are a concern, but the government is taking steps to address the issue.