By the end of this month, the country’s total debt will be around Rs 160 lakh crore. Debt is rising to about 90 per cent of gross domestic product (GDP). Last year, the debt was Rs 147 lakh crore and the GDP was Rs 203 lakh crore. The total debt was 72 per cent of GDP.
Finance Minister Nirmala Sitharaman has announced that another Rs 12 lakh crore will be borrowed this year. It is estimated that GDP will shrink by 7%. In this context, India is becoming one of the most indebted countries in the world. International agencies warn that the GDP-to-debt ratio will remain above 90 per cent for the next five years. High debt is not a problem when economic growth is high. But when faced with a recession, debt becomes a liability.
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