Indian govt. borrowing and inflation

[Sarumankabap]

Govt. of India has been resorting to increased borrowing. Does it have an impact on your personal finances and financial security? Does it have a bearing on the interest earned on your retirement savings? Read the thread and decide for yourself.

1. The total debt by Govt. of India which was 53 Lac crores in March 2014, would baloon to 136 Lac Crores by March 2022. GoI's debt-to-GDP ratio would go up to 62% in FY22, a 16-year-high. By the end of the year, each Indian will owe Rs.1 Lac, a loan they have never taken.

2. More than 40% of our annual budget is financed through borrowings. With high deficits funded through borrowings and limited space for increasing revenues or cutting expenditure, the shortcut that GOI may resort to is controlling interest on borrowings.

3. Lot of people justify our debt by mentioning debt to GDP ratios of Japan, which has a 257% ration and USA which has a 125% ratio. India's total National Debt (including debt by states) to GDP ratio will hit close to 100% in 2022.

4.The comparison stops here. World spends 5.75% of its revenues as interest on debt. Enabled by low interest rates, the interest cost as a ratio to revenues is 12% for Japan and 15% for USA. Interest on term deposits in Japan are close to ZERO and in USA, it is less than 1%.

5. In FY 22, India's total Income and corporate taxes are projected at 10.95 Lac crore and GST at 11.05 lac crore. After paying the states' share of GST, the GOI tax revenues would be 15.51 lac crores. However, India's interest cost on debt is 8.47 lac crores.

6. Look at Major head 2048 in the attached sheet. Our interest cost is 55% of all tax revenues of GoI. With a burgeoning debt, this is a classic trap where we take loans even to repay interest. With such ratios, if we were a chit fund, this would be called a Ponzi scheme!

7. REPO rate is the interest rate at which the RBI lends money to commercial banks. It typically sets the interest rates on our FDs. The Repo rate in India was 8% in Jan 2014. It is today at 4%.

8. In 2014, the average interest rate on One Year FD of SBI was 9%. Today, it is 5%, a 45% fall. In 2014, with inflation at 4.9% and taxation at 30%, inflation adjusted return was 1.1%. In 2021, at SBI rate of 5%, inflation at 6 % and taxation at 30%, return is negative 2.35%

9. Today, Every citizen with a Million in deposit, would be losing 23,500 each year which in 2014 was an earning of 11000 (Post tax and inflation adjusted). Indian banks have 150 Trillion in deposits and we are losing 3.7 Trillion each year.

10. As people, we have falling interest incomes, rising inflation and rising unemployment. As GoI, we are resorting to debt, reducing interest rates to control deficits and pushed to rising debt servicing.

[NiranjanGaaru]

E data evar ichara..... Vaa.... 

NDTV anti national gaada

[JackSeal]

3 minutes ago, NiranjanGaaru said:

E data evar ichara..... Vaa.... 

NDTV anti national gaada

Avi official reports ra 

[NiranjanGaaru]

1 minute ago, JackSeal said:

Avi official reports ra 

Nammesam le

[Kool_SRG]

1 hour ago, NiranjanGaaru said:

E data evar ichara..... Vaa.... 

NDTV anti national gaada

 

1 hour ago, NiranjanGaaru said:

Nammesam le

Official data which is available on official budget site dheenni kuda nammakapothe evaddu bhaagu cheyyaledu mimalni..

 

@Hydrockers

[mmharshaa]

[covid2021]

nijame antava bruh

[Hydrockers]

56 minutes ago, Kool_SRG said:

 

Official data which is available on official budget site dheenni kuda nammakapothe evaddu bhaagu cheyyaledu mimalni..

 

@Hydrockers

Bjp ante ne dochu kune party baa.

Congress vallu pettina vatini ammesi sab ka vikas India shining antu anatam tappa pikedi em ledu 

Aa roads ese batch kuda minge batch Lee anni.

120 lachala kotla appu ante almost 1.8 T $

 

 

 

 

 

 

[Picheshwar]

2 hours ago, Kool_SRG said:

 

Official data which is available on official budget site dheenni kuda nammakapothe evaddu bhaagu cheyyaledu mimalni..

 

@Hydrockers

Candidate jump

[Kool_SRG]

12 hours ago, Hydrockers said:

Bjp ante ne dochu kune party baa.

Congress vallu pettina vatini ammesi sab ka vikas India shining antu anatam tappa pikedi em ledu 

Aa roads ese batch kuda minge batch Lee anni.

120 lachala kotla appu ante almost 1.8 T $

 

 

 

 

 

 

Good and bad happens in all govts..

Manchipanulu anni manaku nachina govt time lone jaruguthaayi ani anukunte dhaanikante moorkhulu evaru undaru more over ippudu idhi ekkuva ayyindhi..

[Ryzen_renoir]

14 hours ago, Sarumankabap said:

Govt. of India has been resorting to increased borrowing. Does it have an impact on your personal finances and financial security? Does it have a bearing on the interest earned on your retirement savings? Read the thread and decide for yourself.

1. The total debt by Govt. of India which was 53 Lac crores in March 2014, would baloon to 136 Lac Crores by March 2022. GoI's debt-to-GDP ratio would go up to 62% in FY22, a 16-year-high. By the end of the year, each Indian will owe Rs.1 Lac, a loan they have never taken.

2. More than 40% of our annual budget is financed through borrowings. With high deficits funded through borrowings and limited space for increasing revenues or cutting expenditure, the shortcut that GOI may resort to is controlling interest on borrowings.

3. Lot of people justify our debt by mentioning debt to GDP ratios of Japan, which has a 257% ration and USA which has a 125% ratio. India's total National Debt (including debt by states) to GDP ratio will hit close to 100% in 2022.

4.The comparison stops here. World spends 5.75% of its revenues as interest on debt. Enabled by low interest rates, the interest cost as a ratio to revenues is 12% for Japan and 15% for USA. Interest on term deposits in Japan are close to ZERO and in USA, it is less than 1%.

5. In FY 22, India's total Income and corporate taxes are projected at 10.95 Lac crore and GST at 11.05 lac crore. After paying the states' share of GST, the GOI tax revenues would be 15.51 lac crores. However, India's interest cost on debt is 8.47 lac crores.

6. Look at Major head 2048 in the attached sheet. Our interest cost is 55% of all tax revenues of GoI. With a burgeoning debt, this is a classic trap where we take loans even to repay interest. With such ratios, if we were a chit fund, this would be called a Ponzi scheme!

7. REPO rate is the interest rate at which the RBI lends money to commercial banks. It typically sets the interest rates on our FDs. The Repo rate in India was 8% in Jan 2014. It is today at 4%.

8. In 2014, the average interest rate on One Year FD of SBI was 9%. Today, it is 5%, a 45% fall. In 2014, with inflation at 4.9% and taxation at 30%, inflation adjusted return was 1.1%. In 2021, at SBI rate of 5%, inflation at 6 % and taxation at 30%, return is negative 2.35%

9. Today, Every citizen with a Million in deposit, would be losing 23,500 each year which in 2014 was an earning of 11000 (Post tax and inflation adjusted). Indian banks have 150 Trillion in deposits and we are losing 3.7 Trillion each year.

10. As people, we have falling interest incomes, rising inflation and rising unemployment. As GoI, we are resorting to debt, reducing interest rates to control deficits and pushed to rising debt servicing.

From 2014 to 2020 , India's debt only grew by 9% per year . 

2020, 2021 is pretty unusual due to cvoid and debt growth is around 16%. 

almost all the leading economists are criticising BJP govt for not taking on more debt and giving the consumers some stimulus and spending on important infrastructure . 

Debt is irrelevant as long as you can service it ,  the biggest failure of this govt is not taking more debt last two years like all other countries .

Also welfare spending is not damaging the country since the money will stay inside the economy , the biggest crisis is everyone with  NPA are walking without any consequences . 

Anil Ambani owes 1 lakh crores to banks and they arnt doing anything 

 

[Ryzen_renoir]

According to all the eminent experts of this DB

Fiscal deficit should be lower , taxes should be cut , debt should be lowered ,  welfare schemes should be stopped  , more investment should go to infrastructure and private companies should be encouraged . 

 

Fiscal deficit is the lowest in a decade right now , from 2014 to now debt grew slower than UPA 1 and 2 , lot of infrastructure investment (mostly to up, gujrat) , corporate tax lowered , ease of doing business is better . 

But why is economy in the dump ?

[Sarumankabap]

India cannot afford to take more debt sir. USD is reserve currency. Vadi bonds konadaniki chala mandi unnar. Indian Rupee will collapse when FPI/FDI stop coming. Oil price rise avute appdu balance of payment ki gold ammali. Its not that easy man.

[Sarumankabap]

Main point entante bank deposits are cruel joke on indians. They dont realise their investments are losing value.

[Ryzen_renoir]

9 minutes ago, Sarumankabap said:

India cannot afford to take more debt sir. USD is reserve currency. Vadi bonds konadaniki chala mandi unnar. Indian Rupee will collapse when FPI/FDI stop coming. Oil price rise avute appdu balance of payment ki gold ammali. Its not that easy man.

Stop spouting the same nonsense that some idiot on Facebook posts 

If the borrowed money is used for valuable assets then nothing of that sort will happen . If the borrowed money is used for unviable nonsense and used to fund fradulent companies then it will happen .

India has  the highest amount of forex reserves in history and  20% depreciation in rupee vs dollar , lowest gdp growth in history , proving your statement wrong