There has been a surge in the total liabilities of the National Democratic Alliance government led by Narendra Modi, which came to power nearly four-and-half-years ago.
The news comes just after the government was censured by the national auditor, the Comptroller and Auditor General (CAG), for borrowing through off-budget channels to mask the true extent of fiscal and revenue deficits.
The recently released eighth edition of the Status Paper on Government Debt said the government’s total liabilities had risen to 82 trillion rupees (US$1.15 trillion). That is a 49% increase over 54.9 trillion rupees ($771 billion) when the government took office in June 2014, Indo Asian News Service said.
This total stemmed from a 51.7% growth in public debt from 48 trillion rupees ($674 billion) to 73 trillion rupees ($1.03 trillion) in the four-and-half year period, which in turn was driven by 54% rise in internal debt to about 68 trillion rupees ($954 billion), the report added.
Market loans rose by 47.5% to more than 52 trillion rupees ($730 billion) during the period. Debt raised through gold bonds was nil at the end of June 2014 but now stands at 90.89 billion rupees ($1.28 billion), including the gold monetization scheme.
The report noted that the government is primarily resorting to market-linked borrowings to finance its fiscal deficit. For the first eight months of the current fiscal year, the deficit till November stood at 7.17 trillion rupees ($100 billion) or 114.8% of the full year’s target of 6.24 trillion rupees ($87.6 billion).
Earlier the CAG recommended that the government should consider instituting a policy framework for off-budget financing, which should include a disclosure about its rationale and objective to parliament.
In some cases money invested in small savings funds, in which most investors are salaried workers and pensioners, was used for off-budget financing.
The auditor warned that off-budget financing lacks transparent disclosures and could pose a fiscal risk in the long term if the entity that raises the funds fails to fulfill its debt obligations.