India’s Per capita debt burden at Rs 44,095 increased by Rs 2,966 in 2014-15, which include external and internal debt and other liabilities. The increase in per capita debt was mostly an outcome of higher developmental expenditure to achieve a better growth rate. According to International Debt Statistics 2015 of the World Bank, India ranks fourth on external debt on the list of 20 developing countries. The debt for 2013-14 was at Rs 41,129.
The domestic debt service payment in the government account stood at Rs 4.04 lakh crore, Rs 4.85 lakh crore and Rs 5.56 lakh crore in 2012-13, 2013-14 and 2014-15 respectively, whereas external debt service payment came in at $3.72 million, $3.66 million and $3.89 million in 2012-13, 2013-14 and 2014-15 respectively. The total outstanding liability as of March 31, 2015, read Rs 68.95 lakh crore.
While companies as well as governments avail of external loans, internal debt is mainly on account of government borrowings, either from the market or even from individuals in the form of small savings schemes. A high debt level also comes with a high interest burden, economists have been have asking the government for long to cut down on interest outgo and subsidies so that more resources are available for physical and social infrastructure.