At regular intervals, several global economists were saying, the Indian economy is growing robust under the leadership of PM Modi. But we Indians were stunned after hearing reports that claimed the debt of India increased by about 50 percent under Modi government and currently stood at Rs 82 lakh crore. After the figures released by the 8th edition of the Status Paper on Government Debt, the hate-Modi brigade started to shout that PM Modi is detrimental for the Indian economy as the debt under him has raised massively.
Soon the gang that didn’t have any issues to target the Modi government started to blabber that “Modinomics has completely failed, there are no jobs in India, manufacturing sector has totally collapsed and PM Modi does only the jumlas. So its time to throw him out of power in 2019 elections and save India”.
The storm on the alleged rise in debt can be dealt in two ways. First, to think that “people will definitely come to know the truth behind this. The fear mongering by the anti-Modi brigade will go in vein”. But what if the people of incredible India believe the lies spread by Modi haters as the truth? We all know how the multi-billion media houses that work on the behest of Congress party does everyday. So if we don’t make an attempt to debunk the lies of Congress party and create awareness among Indians, then there is a chance that people might believe that the lie as the actual truth.
The second way to deal with this misinformation is, through this article. So,
- Is the information stated in 8th edition of the Status Paper on Government Debt is false?
- Is the anti-Modi media houses are lying?
- In a hurry to back the Modi government, am I saying that India is not having heavy debt on it?
The information about debt is not at all false and it is also true that India is on debt. But what the media houses are claiming is half-truth. There is nothing like the Indian economy has totally collapsed under PM Modi. They are saying that the only way to save India is by bringing down Modi, and this exposes the reality behind the claim that India is sinking in debt.
If you want to know the exact issue of debt on a nation, the main thing you need to understand is that there is a complete difference between me or you taking a loan from a bank, and the nation being under debt. If a loan is a liability to a normal Indian or a small firm, it becomes a sign of positivity when it comes to an economy. The loan factor plays a key role in boosting investor confidence.
But the nation should have a favorable atmosphere. A loan can be a burden, if a nation’s GDP is collapsing but a positive GDP and a robust economic growth will welcome debt. So with increasing GDP and economic growth, even if the loan amount grows, then we can claim that the nation is suitable for inviting global investors. This is a basic concept and even a normal individual with basic skills can understand this. But our Indian media couldn’t get it. Or acted as of it didn’t understand?
In reality, India’s debt ratio is in a positive state. To say in even more positive tone, India’s growth is even more stronger than many of the larger economies of the world. Every year the government takes a loan from internal and external sources to balance the fiscal deficit. And the annual fiscal deficit is called the loan of the country.
It should be noted that since the past several decades, the debt of the nation is going on increasing. And the question is, do the central government has the capacity to bear the brunt of the loan that has the interest rate on it?
Economists use “debt to equity” term to comment on this. As GDP increase, the income of the nation increase. And when the income of the nation increase, it gives the capacity to the government to repay the loan. Even the capacity to borrow more loan also increases. But the media are not speaking on this just to portray PM Modi in a bad light.
Since 2010, India’s Debt to GDP ratio is around 44 to 47 percent. Look at the below table.
In 2013, debt to GDP ratio was 46.98% and in 2017 it had improved and reached to 45.11%. When we combine central and state government’s loan, the ratio is still around 67-72% and this will further decrease by 2024. So in whichever way we see, the ratio hasn’t reached 100 percent which means we can still borrow the loan. This is not said by any Pappus but by the international agencies.
But the media houses are not just spread misinformation but also hid the press release of Ministry of Finance about “8th Edition of the Status Paper on Government Debt”.
The central government had clearly said:
- “The overall liabilities of the Central Government are on a medium-term declining trajectory and Government’s Debt Portfolio is characterised by prudent risk profile. Government is primarily resorting to market-linked borrowings for financing its fiscal deficit. Conventional indicators of Debt sustainability, i.e., Debt/GDP ratio, interest payment to revenue receipts, shares of short-term Debt/External Debt/FRBs in total debt indicate that the debt profile of the Government is comfortably placed in terms of debt sustainability parameters and is consistently improving”.
But our media hid these facts and just blabbered that debt of the nation has increased by 50 percent under PM Modi. But these should know one fact that there is no nation which is without a loan. From richest nations like Qatar, Luxembourg to poor nations like Uganda, their generations to come are under debt.
Even the United States, Saudi Arabia, Germany, China, Australia, Ghana, Turkestan and many other nations have mammoth debt on them, but it will be in various forms and these increase annually. When compared to India these have more burden on them.
For example, India is in a debt of Rs 82 lakh crore (529 billion dollars), so every citizen has a burden of 380 dollars. But the United States has a burden of 16,398 billion and every US citizen has a debt of 58,200 on them. Meanwhile, Germany has a debt of 5,398 billion and every citizen has a debt of 65,600 dollars.
And there’s nothing to panic about this as the loan among nations is not considered as a burden that has to be repaid but it is considered as a way to enhance the bonding. Even the opposition parties know this truth. But they don’t want to reveal that truth for the sake of political gains. The people who shout about the debt, did they try to see what was the ratio when the Congress party was in power?
Now, look at the below table that shows that figures during UPA 1 and UPA 2. The loan was 68 percent and 89 percent respectively. When the Atal Bihari Vajpayee government was routed out, the loan was Rs 17.20 lakh but in just 10 years of UPA government, it increased by 300 percent. Forget GDP, other than the rise in assets of 10 Janpath, the entire nation suffered.
No one valued India globally during the UPA 1 and UPA 2 era and all that India did then was arranged a cricket match to maintain peace when Pakistan was attacking and killing Indians. But today the same Congressmen are calling patriots as hyper-nationalists and bhakts.
From Rs 17.2 lakh crore in 2004, the Congress party increased the debt to Rs 55 lakh crore in just ten years. But the same Congress leaders are attacking PM Modi by riding on half-truths. Why don’t you say that UPA 1 and UPA 2 tripled India’s loan in just ten years? Scared that Indians will slam you?
Indians please remember that when it comes to taking loan from external sources like foreign nations and institutions, the UPA 1 had increased the loan by 443% and UPA 2 by 60% but during the Modi era it has been increased by just 0.04 %.
- A loan of Central Govt (in crores)
The Finance Ministry in its notification has clearly said that the loan requirement is fulfilled by relying on internal sources instead of begging with foreign nations.
To conclude, the claim that India’s debt increasing under PM Modi is just an exaggeration of misinformation and there’s nothing to be worried about. India’s economy is rock solid and as it is the election season, the opposition parties have resorted to fake news to target the Modi government