Dear Readers,
Current affairs is an important component of several
competitive exams such as the UPSC Civil Services Examination, SSC-CGL, Bank PO
& PSU entrance tests, etc. Therefore, understanding the
terms/concepts/events that make news is critical for aspirants. We at PaGaLGuY
bring you series of articles explaining some of these important
concepts/events. This article is on India’s per capita debt burden.
Government’s focus on increasing developmental expenditure to
improve growth has resulted in an increased per capita debt burden, which
stands at Rs.44, 095 for the current fiscal year. In 2013-14, the
figure was Rs.41, 129. Thus, it has increased by Rs.2966.
What is per capita debt
burden?
It is the value of a government’s total debt expressed in
terms of how much it owes each citizen in the country. The value gives us an
idea of the government’s ability to repay the debt i.e. whether it can settle
the debt or might default.
In figures
The debt burden comprised external and internal debt and
other liabilities according to statements of the government’s provisional
accounts.
The reason for the increase was attributed to higher
developmental expenditure to enhance the country’s growth rate.
The domestic debt service payment (loan amount including
interest and principal amounts) in the government account stood at Rs.5.56 lakh
crore in 2014-15. For fiscal years 2012-13 and 2013-14, it was Rs.4.04 lakh
crore, Rs.4.85 lakh crore, respectively.
As per World Bank’s International Debt Statistics 2015,
India is fourth in terms of absolute external debt from among 20 developing
countries. The external debt service payment was set at USD 3.72 million in
2014-15. For fiscal years 2012-13 and 2013-14, it was USD 3.66 million and USD
3.89 million, respectively. The total outstanding liability (total debt yet to
be paid) as on March 31, 2015 was Rs.68.95 lakh crore.
Measures to rein in
debt
In order to curb a further excess in per capita debt, the government
will adopt fiscal consolidation (policies undertaken to reduce deficits and
debt accumulation), steadily shift from expansionary measures in an organised
manner.
The Union Government has announced a fiscal road map to
bring down fiscal deficit to 3 per cent by 2016-17 with a reduction of 0.5-0.6
per cent every year.
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