SlideShare a Scribd company logo
1 of 10
Download to read offline
By: Rohan Ranade
The “Debt Trap” Effect of
Governments Increasing
Borrowing Programs
Year After Year
• 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 ?
Is India in Debt Trap?
India Debt Trend
• Developing Country
• Strategy to manage Resources
• Improve Relations with India
Reasons for giving Debts to India
• Corruption
• Political Instability
• Under Performing Government Departments
• Increase in Government Spending
• Exports Deficit
• Unplanned Use of the Money
Reason for taking Debt
• 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
• Political Stability
• Accountability
• Economic Conditions
• Privatization
• Law and Order
Recommendation
– 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
THANK YOU

More Related Content

What's hot

4. domar's growth model
4. domar's growth model4. domar's growth model
4. domar's growth modelPrabha Panth
 
14th finance commission of India
14th finance commission of India14th finance commission of India
14th finance commission of IndiaThazuala
 
European Union - EU - International Business- Manu Melwin Joy
European Union - EU - International Business- Manu Melwin JoyEuropean Union - EU - International Business- Manu Melwin Joy
European Union - EU - International Business- Manu Melwin Joymanumelwin
 
Tariffs and quota
Tariffs and quotaTariffs and quota
Tariffs and quotaTintoTom2
 
Free trade vs protection
Free trade vs protectionFree trade vs protection
Free trade vs protectionSonam Sangwan
 
Structural Changes in Indian Economy
Structural Changes in Indian EconomyStructural Changes in Indian Economy
Structural Changes in Indian EconomyManish Purani
 
Export-Oriented Industrialization (EOI): Arguments For and Against What Have ...
Export-Oriented Industrialization (EOI): Arguments For and Against What Have ...Export-Oriented Industrialization (EOI): Arguments For and Against What Have ...
Export-Oriented Industrialization (EOI): Arguments For and Against What Have ...Dr.Choen Krainara
 
Export & Import substitution industrialization.
Export & Import substitution industrialization.Export & Import substitution industrialization.
Export & Import substitution industrialization.Mohammad Kawsar Ahammed
 
Principle of maximum social advantage
Principle of maximum social advantagePrinciple of maximum social advantage
Principle of maximum social advantageCHOWDAPPA V A
 
Budget, deficit and deficit financing
Budget, deficit and deficit financing Budget, deficit and deficit financing
Budget, deficit and deficit financing SUNEHA SHARMA
 
Principle of maximum social advantage
Principle of maximum social advantagePrinciple of maximum social advantage
Principle of maximum social advantageHumsi Singh
 
New economic policy 1991
New economic policy 1991New economic policy 1991
New economic policy 1991Seema Thakur
 
Harrod domar model of growth
Harrod domar model of growthHarrod domar model of growth
Harrod domar model of growthManojSharma968
 
Public debt in india
Public debt in indiaPublic debt in india
Public debt in indiaheerkhant
 

What's hot (20)

4. domar's growth model
4. domar's growth model4. domar's growth model
4. domar's growth model
 
14th finance commission of India
14th finance commission of India14th finance commission of India
14th finance commission of India
 
European Union - EU - International Business- Manu Melwin Joy
European Union - EU - International Business- Manu Melwin JoyEuropean Union - EU - International Business- Manu Melwin Joy
European Union - EU - International Business- Manu Melwin Joy
 
Tariffs and quota
Tariffs and quotaTariffs and quota
Tariffs and quota
 
Fiscal Policy
Fiscal PolicyFiscal Policy
Fiscal Policy
 
Fiscal policy
Fiscal policyFiscal policy
Fiscal policy
 
Fiscal policy
Fiscal policyFiscal policy
Fiscal policy
 
Free trade vs protection
Free trade vs protectionFree trade vs protection
Free trade vs protection
 
Structural Changes in Indian Economy
Structural Changes in Indian EconomyStructural Changes in Indian Economy
Structural Changes in Indian Economy
 
Fiscal ppt
Fiscal pptFiscal ppt
Fiscal ppt
 
Export-Oriented Industrialization (EOI): Arguments For and Against What Have ...
Export-Oriented Industrialization (EOI): Arguments For and Against What Have ...Export-Oriented Industrialization (EOI): Arguments For and Against What Have ...
Export-Oriented Industrialization (EOI): Arguments For and Against What Have ...
 
Export & Import substitution industrialization.
Export & Import substitution industrialization.Export & Import substitution industrialization.
Export & Import substitution industrialization.
 
Principle of maximum social advantage
Principle of maximum social advantagePrinciple of maximum social advantage
Principle of maximum social advantage
 
Budget, deficit and deficit financing
Budget, deficit and deficit financing Budget, deficit and deficit financing
Budget, deficit and deficit financing
 
Principle of maximum social advantage
Principle of maximum social advantagePrinciple of maximum social advantage
Principle of maximum social advantage
 
New economic policy 1991
New economic policy 1991New economic policy 1991
New economic policy 1991
 
Harrod domar model of growth
Harrod domar model of growthHarrod domar model of growth
Harrod domar model of growth
 
Public debt in india
Public debt in indiaPublic debt in india
Public debt in india
 
Imf
ImfImf
Imf
 
Economic Aspect G20
Economic Aspect G20Economic Aspect G20
Economic Aspect G20
 

Similar to Debt trap

Debt Managment in Pakistan
Debt Managment in PakistanDebt Managment in Pakistan
Debt Managment in PakistanGhulam Hasnain
 
Ecoprojectslides
EcoprojectslidesEcoprojectslides
EcoprojectslidesSara Rajput
 
Research moezza
Research moezzaResearch moezza
Research moezzamoezza
 
Relationship between bribery and economic growth
Relationship between bribery and economic growthRelationship between bribery and economic growth
Relationship between bribery and economic growthNavin Elias
 
Debt Managment in Pakistan
Debt Managment in PakistanDebt Managment in Pakistan
Debt Managment in PakistanGhulam Hasnain
 
Debt issues for Canada and the World - risk and market analysis
Debt issues for Canada and the World - risk and market analysisDebt issues for Canada and the World - risk and market analysis
Debt issues for Canada and the World - risk and market analysispaul young cpa, cga
 
Economic issues and trends in India 2013-14
Economic issues and trends in India 2013-14Economic issues and trends in India 2013-14
Economic issues and trends in India 2013-14Abinash Pandia
 
Final dissertation
Final dissertationFinal dissertation
Final dissertationVineet Dubey
 
Evolving Financial Systems to Reach the SDGs
Evolving Financial Systems to Reach the SDGsEvolving Financial Systems to Reach the SDGs
Evolving Financial Systems to Reach the SDGsSDGsPlus
 
Net External Liabilities and Economic Growth: A Case Study of pakistan
Net External Liabilities and Economic Growth: A Case Study of pakistanNet External Liabilities and Economic Growth: A Case Study of pakistan
Net External Liabilities and Economic Growth: A Case Study of pakistansanaullah noonari
 
Iiste next external labiltes
Iiste next external labiltesIiste next external labiltes
Iiste next external labiltessanaullah noonari
 
Final dissertation
Final dissertationFinal dissertation
Final dissertationVineet Dubey
 
External debt and economic growth case of jordan (1990 2011)
External debt and economic growth case of jordan (1990 2011)External debt and economic growth case of jordan (1990 2011)
External debt and economic growth case of jordan (1990 2011)Alexander Decker
 

Similar to Debt trap (20)

Debt Managment in Pakistan
Debt Managment in PakistanDebt Managment in Pakistan
Debt Managment in Pakistan
 
Ecoprojectslides
EcoprojectslidesEcoprojectslides
Ecoprojectslides
 
Pakistan's Debt Management Strategy
Pakistan's Debt Management StrategyPakistan's Debt Management Strategy
Pakistan's Debt Management Strategy
 
Research moezza
Research moezzaResearch moezza
Research moezza
 
Relationship between bribery and economic growth
Relationship between bribery and economic growthRelationship between bribery and economic growth
Relationship between bribery and economic growth
 
Debt Managment in Pakistan
Debt Managment in PakistanDebt Managment in Pakistan
Debt Managment in Pakistan
 
The Effects of Public Debt on Economic Growth in Bangladesh: An Evidence from...
The Effects of Public Debt on Economic Growth in Bangladesh: An Evidence from...The Effects of Public Debt on Economic Growth in Bangladesh: An Evidence from...
The Effects of Public Debt on Economic Growth in Bangladesh: An Evidence from...
 
Debt issues for Canada and the World - risk and market analysis
Debt issues for Canada and the World - risk and market analysisDebt issues for Canada and the World - risk and market analysis
Debt issues for Canada and the World - risk and market analysis
 
Economic issues and trends in India 2013-14
Economic issues and trends in India 2013-14Economic issues and trends in India 2013-14
Economic issues and trends in India 2013-14
 
Economic survey
Economic surveyEconomic survey
Economic survey
 
Problem of debt servicing
Problem of debt servicingProblem of debt servicing
Problem of debt servicing
 
Final dissertation
Final dissertationFinal dissertation
Final dissertation
 
Artifact project by tekalign
Artifact project by tekalignArtifact project by tekalign
Artifact project by tekalign
 
Evolving Financial Systems to Reach the SDGs
Evolving Financial Systems to Reach the SDGsEvolving Financial Systems to Reach the SDGs
Evolving Financial Systems to Reach the SDGs
 
Net External Liabilities and Economic Growth: A Case Study of pakistan
Net External Liabilities and Economic Growth: A Case Study of pakistanNet External Liabilities and Economic Growth: A Case Study of pakistan
Net External Liabilities and Economic Growth: A Case Study of pakistan
 
Iiste next external labiltes
Iiste next external labiltesIiste next external labiltes
Iiste next external labiltes
 
Group 2 eco
Group 2 ecoGroup 2 eco
Group 2 eco
 
Final dissertation
Final dissertationFinal dissertation
Final dissertation
 
External debt and economic growth case of jordan (1990 2011)
External debt and economic growth case of jordan (1990 2011)External debt and economic growth case of jordan (1990 2011)
External debt and economic growth case of jordan (1990 2011)
 
External debt
External debtExternal debt
External debt
 

Recently uploaded

Zimbabwe's New Gold-Backed Currency- A Path to Stability or Another Monetary.pdf
Zimbabwe's New Gold-Backed Currency- A Path to Stability or Another Monetary.pdfZimbabwe's New Gold-Backed Currency- A Path to Stability or Another Monetary.pdf
Zimbabwe's New Gold-Backed Currency- A Path to Stability or Another Monetary.pdfFREELANCER
 
(Gender) tone at the top: the effect of board diversity on gender inequality
(Gender) tone at the top: the effect of board diversity on gender inequality(Gender) tone at the top: the effect of board diversity on gender inequality
(Gender) tone at the top: the effect of board diversity on gender inequalityGRAPE
 
Hello this ppt is about seminar final project
Hello this ppt is about seminar final projectHello this ppt is about seminar final project
Hello this ppt is about seminar final projectninnasirsi
 
Seeman_Fiintouch_Newsletter_Apr-2024 (1).pdf
Seeman_Fiintouch_Newsletter_Apr-2024 (1).pdfSeeman_Fiintouch_Newsletter_Apr-2024 (1).pdf
Seeman_Fiintouch_Newsletter_Apr-2024 (1).pdfAshis Kumar Dey
 
What is sip and What are its Benefits in 2024
What is sip and What are its Benefits in 2024What is sip and What are its Benefits in 2024
What is sip and What are its Benefits in 2024prajwalgopocket
 
Uk-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Raw...
Uk-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Raw...Uk-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Raw...
Uk-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Raw...Amil baba
 
OAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptx
OAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptxOAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptx
OAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptxhiddenlevers
 
TEST BANK For Auditing & Assurance Services A Systematic Approach, 11th Editi...
TEST BANK For Auditing & Assurance Services A Systematic Approach, 11th Editi...TEST BANK For Auditing & Assurance Services A Systematic Approach, 11th Editi...
TEST BANK For Auditing & Assurance Services A Systematic Approach, 11th Editi...marcuskenyatta275
 
Introduction to Health Economics Dr. R. Kurinji Malar.pptx
Introduction to Health Economics Dr. R. Kurinji Malar.pptxIntroduction to Health Economics Dr. R. Kurinji Malar.pptx
Introduction to Health Economics Dr. R. Kurinji Malar.pptxDrRkurinjiMalarkurin
 
Global Macroeconomics: Introducing GDP 2.0.pdf
Global Macroeconomics: Introducing GDP 2.0.pdfGlobal Macroeconomics: Introducing GDP 2.0.pdf
Global Macroeconomics: Introducing GDP 2.0.pdfnqsh
 
ΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτος
ΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτοςΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτος
ΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτοςNewsroom8
 
Test bank for corporate finance 13th stephen ross randolph westerfield jeffre...
Test bank for corporate finance 13th stephen ross randolph westerfield jeffre...Test bank for corporate finance 13th stephen ross randolph westerfield jeffre...
Test bank for corporate finance 13th stephen ross randolph westerfield jeffre...marcuskenyatta275
 
2024-04-09 - Pension Playpen roundtable - slides.pptx
2024-04-09 - Pension Playpen roundtable - slides.pptx2024-04-09 - Pension Playpen roundtable - slides.pptx
2024-04-09 - Pension Playpen roundtable - slides.pptxHenry Tapper
 
Money Forward Integrated Report “Forward Map” 2024
Money Forward Integrated Report “Forward Map” 2024Money Forward Integrated Report “Forward Map” 2024
Money Forward Integrated Report “Forward Map” 2024Money Forward
 
Aon-UK-DC-Pension-Tracker-Q1-2024. slideshare
Aon-UK-DC-Pension-Tracker-Q1-2024. slideshareAon-UK-DC-Pension-Tracker-Q1-2024. slideshare
Aon-UK-DC-Pension-Tracker-Q1-2024. slideshareHenry Tapper
 
Demographic transition and the rise of wealth inequality
Demographic transition and the rise of wealth inequalityDemographic transition and the rise of wealth inequality
Demographic transition and the rise of wealth inequalityGRAPE
 
ekthesi-trapeza-tis-ellados-gia-2023.pdf
ekthesi-trapeza-tis-ellados-gia-2023.pdfekthesi-trapeza-tis-ellados-gia-2023.pdf
ekthesi-trapeza-tis-ellados-gia-2023.pdfSteliosTheodorou4
 
Building pressure? Rising rents, and what to expect in the future
Building pressure? Rising rents, and what to expect in the futureBuilding pressure? Rising rents, and what to expect in the future
Building pressure? Rising rents, and what to expect in the futureResolutionFoundation
 
2B Nation-State.pptx contemporary world nation
2B  Nation-State.pptx contemporary world nation2B  Nation-State.pptx contemporary world nation
2B Nation-State.pptx contemporary world nationko9240888
 

Recently uploaded (19)

Zimbabwe's New Gold-Backed Currency- A Path to Stability or Another Monetary.pdf
Zimbabwe's New Gold-Backed Currency- A Path to Stability or Another Monetary.pdfZimbabwe's New Gold-Backed Currency- A Path to Stability or Another Monetary.pdf
Zimbabwe's New Gold-Backed Currency- A Path to Stability or Another Monetary.pdf
 
(Gender) tone at the top: the effect of board diversity on gender inequality
(Gender) tone at the top: the effect of board diversity on gender inequality(Gender) tone at the top: the effect of board diversity on gender inequality
(Gender) tone at the top: the effect of board diversity on gender inequality
 
Hello this ppt is about seminar final project
Hello this ppt is about seminar final projectHello this ppt is about seminar final project
Hello this ppt is about seminar final project
 
Seeman_Fiintouch_Newsletter_Apr-2024 (1).pdf
Seeman_Fiintouch_Newsletter_Apr-2024 (1).pdfSeeman_Fiintouch_Newsletter_Apr-2024 (1).pdf
Seeman_Fiintouch_Newsletter_Apr-2024 (1).pdf
 
What is sip and What are its Benefits in 2024
What is sip and What are its Benefits in 2024What is sip and What are its Benefits in 2024
What is sip and What are its Benefits in 2024
 
Uk-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Raw...
Uk-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Raw...Uk-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Raw...
Uk-NO1 Rohani Amil In Islamabad Amil Baba in Rawalpindi Kala Jadu Amil In Raw...
 
OAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptx
OAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptxOAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptx
OAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptx
 
TEST BANK For Auditing & Assurance Services A Systematic Approach, 11th Editi...
TEST BANK For Auditing & Assurance Services A Systematic Approach, 11th Editi...TEST BANK For Auditing & Assurance Services A Systematic Approach, 11th Editi...
TEST BANK For Auditing & Assurance Services A Systematic Approach, 11th Editi...
 
Introduction to Health Economics Dr. R. Kurinji Malar.pptx
Introduction to Health Economics Dr. R. Kurinji Malar.pptxIntroduction to Health Economics Dr. R. Kurinji Malar.pptx
Introduction to Health Economics Dr. R. Kurinji Malar.pptx
 
Global Macroeconomics: Introducing GDP 2.0.pdf
Global Macroeconomics: Introducing GDP 2.0.pdfGlobal Macroeconomics: Introducing GDP 2.0.pdf
Global Macroeconomics: Introducing GDP 2.0.pdf
 
ΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτος
ΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτοςΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτος
ΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτος
 
Test bank for corporate finance 13th stephen ross randolph westerfield jeffre...
Test bank for corporate finance 13th stephen ross randolph westerfield jeffre...Test bank for corporate finance 13th stephen ross randolph westerfield jeffre...
Test bank for corporate finance 13th stephen ross randolph westerfield jeffre...
 
2024-04-09 - Pension Playpen roundtable - slides.pptx
2024-04-09 - Pension Playpen roundtable - slides.pptx2024-04-09 - Pension Playpen roundtable - slides.pptx
2024-04-09 - Pension Playpen roundtable - slides.pptx
 
Money Forward Integrated Report “Forward Map” 2024
Money Forward Integrated Report “Forward Map” 2024Money Forward Integrated Report “Forward Map” 2024
Money Forward Integrated Report “Forward Map” 2024
 
Aon-UK-DC-Pension-Tracker-Q1-2024. slideshare
Aon-UK-DC-Pension-Tracker-Q1-2024. slideshareAon-UK-DC-Pension-Tracker-Q1-2024. slideshare
Aon-UK-DC-Pension-Tracker-Q1-2024. slideshare
 
Demographic transition and the rise of wealth inequality
Demographic transition and the rise of wealth inequalityDemographic transition and the rise of wealth inequality
Demographic transition and the rise of wealth inequality
 
ekthesi-trapeza-tis-ellados-gia-2023.pdf
ekthesi-trapeza-tis-ellados-gia-2023.pdfekthesi-trapeza-tis-ellados-gia-2023.pdf
ekthesi-trapeza-tis-ellados-gia-2023.pdf
 
Building pressure? Rising rents, and what to expect in the future
Building pressure? Rising rents, and what to expect in the futureBuilding pressure? Rising rents, and what to expect in the future
Building pressure? Rising rents, and what to expect in the future
 
2B Nation-State.pptx contemporary world nation
2B  Nation-State.pptx contemporary world nation2B  Nation-State.pptx contemporary world nation
2B Nation-State.pptx contemporary world nation
 

Debt trap

  • 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?
  • 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