This document discusses India's rising government debt levels and the potential "debt trap" effect. It notes that India's debt-to-GDP ratio was 67% in 2013. It defines a debt trap as borrowing to repay existing loans with interest rates higher than economic growth. The document lists reasons for India taking on debt like corruption and deficits, and effects of high debt like reduced spending on public welfare programs. It recommends solutions like political stability, accountability and privatization to address India's debt issues.

1. By: Rohan Ranade
The “Debt Trap” Effect of
Governments Increasing
Borrowing Programs
Year After Year

2. • Bond yield is higher than economy
growth rate
• No country can live in Debt Trap
for long
• Loan taken to repay loan
• Most important macroeconomic
issue in India
• India's Debt-GDP ratio-67%(FY2013)
What is Debt Trap ?

3. Is India in Debt Trap?

4. India Debt Trend

5. • Developing Country
• Strategy to manage Resources
• Improve Relations with India
Reasons for giving Debts to India

6. • Corruption
• Political Instability
• Under Performing Government Departments
• Increase in Government Spending
• Exports Deficit
• Unplanned Use of the Money
Reason for taking Debt

7. • Internal Debt Trap
• External Debt Trap
• Direct Real Burden
• Decline in Expenditure to Public Welfare Programs
• Decline in the Value of Nation’s Currency
• Burden of Unproductive Foreign Debt
• Political Exploitation
Effects on the Economy

8. • Political Stability
• Accountability
• Economic Conditions
• Privatization
• Law and Order
Recommendation

9. – www.tradingeconomics.com/india/government-debt-to-gdp
– www.businesseconomics.in/?q=node/1627
– www.businessdictionary.com/definition/Debt-Trap.html
– www.economist.com/node/488864
References
Indian Economy
By K. R. Gupta, J. R. Gupta
The Indian Economy Since 1991:
Economic Reforms and
Performance
By B. A. Prakash

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