As we get closer to entering 2025, we need to take a step back , reflect and then plan ahead. Let’s look at some data points to chart our future course.
Between 2014 and 2024, India’s national debt has experienced a significant increase. In 2014, the total debt of the Government of India was approximately ₹55.87 lakh crore. By the end of the 2024-2025 fiscal year, this figure is estimated to reach ₹181.68 lakh crore, indicating a more than threefold rise over the decade and despite this high rise in debt, the growth is still hovering around 3% if we consider inflation.
We should also consider the alarming the debt-to-GDP ratio. In 2014, India’s government debt was about 23.9% of GDP. By 2023, this ratio had increased to approximately 81.59%.
As of the 2024-25 fiscal year, India’s total public debt is projected to be ₹181.68 lakh crore, an increase from ₹168.72 lakh crore in 2023-24.
At the state level, debt burdens vary significantly, often measured as a percentage of the state’s Gross State Domestic Product (GSDP).
Here is a summary of the debt-to-GSDP ratios for various states based on 2024-25 budget estimates:
| State | Debt-to-GSDP Ratio (%) | Fiscal Deficit (%) |
| Punjab | 44.1 | 3.8 |
| Himachal Pradesh | 42.5 | 4.7 |
| Arunachal Pradesh | 40.8 | 6.3 |
| Nagaland | 38.6 | 3.0 |
| Meghalaya | 37.9 | 3.8 |
| West Bengal | 36.9 | 3.6 |
| Rajasthan | 36.0 | 3.9 |
| Bihar | 35.7 | 3.0 |
| Manipur | 34.5 | 3.1 |
| Tripura | 34.5 | 4.0 |
| Kerala | 34.0 | 3.4 |
| Sikkim | 34.0 | 5.4 |
| Andhra Pradesh* | 33.3 | 3.8 |
| Uttar Pradesh | 32.7 | 3.46 |
| Madhya Pradesh | 32.0 | 4.1 |
| Mizoram | 29.0 | 2.8 |
| Telangana | 27.38 | 3.0 |
| Jharkhand | 27.0 | 2.0 |
| Tamil Nadu | 26.4 | 3.4 |
| Haryana | 26.2 | 2.8 |
| Chhattisgarh | 24.4 | 3.7 |
| Uttarakhand | 24.2 | 2.4 |
| Karnataka | 23.7 | 3.0 |
| Assam | 23.47 | 3.5 |
| Goa | 21.9 | 2.5 |
| Maharashtra | 18.4 | 2.6 |
| Gujarat | 15.3 | 1.9 |
| Odisha | 13.6 | 3.5 |
| Delhi | 3.94 | 0.7 |
*Data for Andhra Pradesh is for the 2023-24 fiscal year.
These figures indicate that states like Punjab, Himachal Pradesh, and Arunachal Pradesh have the highest debt-to-GSDP ratios, reflecting significant debt burdens relative to their economic output.
The substantial rise in the debt over this period has been an expenditure on programs and projects which have not been able to lift India’s growth to double digits, and this will pose a major challenge in the coming years, and according to my analysis, 2025 would be a tough year. While debts continue to rise, growth continues to be a question mark. We seem to be failing to understand the real problems facing the nation, and more over, we are oblivious to the challenges appearing on the horizon.
Household Savings Continue to Decline
Over the past decade, India’s household savings rate has experienced a notable decline. In the fiscal year 2022-23, net household financial savings dropped to 5.3% of GDP, down from 7.3% in 2021-22, marking the lowest level in 47 years.
Glaring to note:
- Increased Household Debt: There has been a significant rise in household borrowing, with annual borrowings reaching 5.8% of GDP in 2022-23, the second-highest level since the 1970s. A substantial portion of this debt comprises non-mortgage loans, including those for consumption purposes such as credit cards and consumer durables. This is alarming for any LMIC!
- Shift from Financial to Physical Assets: Households have been reallocating their savings from financial instruments to physical assets like real estate and gold. This shift has contributed to the decline in net financial savings, as investments in physical assets are less liquid and not readily available for productive investments in the economy.
- High Inflation Rates: Elevated inflation has eroded purchasing power, compelling households to dip into their savings to maintain consumption levels. The Consumer Price Index (CPI) averaged 6.7% in 2022-23, higher than the 10-year average of 5.4%, intensifying the pressure on household finances.
This decline in household savings poses challenges for the Indian economy, including reduced funds available for investment, potential increases in borrowing costs, and heightened financial vulnerability among households.
HNIs continue to leave
Over the past decade, there has been a notable increase in the number of Indians renouncing their citizenship to settle abroad. According to government data, more than 1.6 million Indians have given up their citizenship since 2011. In 2022, a record 225,620 individuals renounced their Indian citizenship, marking the highest annual figure to date. This trend continued in 2023, with 216,219 Indians surrendering their citizenship.
High-net-worth individuals (HNWIs) have been a significant segment of this emigrant population. In 2022, approximately 7,500 HNWIs left India, and an estimated 6,500 were projected to do so in 2023. The Henley Private Wealth Migration Report 2024 forecasts a net loss of 4,300 millionaires from India in 2024, indicating a sustained outflow of wealthy individuals.
The primary destinations for Indian emigrants have been the United States, the United Kingdom, Canada, Australia, and the United Arab Emirates. Factors influencing this migration include the pursuit of better education and employment opportunities, favorable tax regimes, higher standards of living, and enhanced global mobility. For instance, in 2023, the UK reported that Indian nationals accounted for 253,000 non-European Union immigrants, making them the top non-EU nationality for immigration into the UK.
In summary,over the past decade, there has been a significant increase in the number of Indians, including high-net-worth individuals, emigrating to countries like the United States, the United Kingdom, Canada, Australia, and the United Arab Emirates, driven by various factors such as better opportunities and living standards.
NPAs – Debt Waivers
Over the past decade, Indian banks have written off substantial amounts of non-performing assets (NPAs). Between the financial years 2014-15 and 2023-24, banks wrote off approximately ₹12.3 lakh crore in loans. Notably, public sector banks (PSBs) accounted for ₹6.5 lakh crore of these write-offs during the last five years (FY20-FY24).
The State Bank of India (SBI), holding nearly 20% of the market share in India’s banking sector, led these write-offs with ₹2 lakh crore during this period, followed by Punjab National Bank (PNB) with ₹94,702 crore. The peak year for write-offs was FY19, with banks writing off ₹2.4 lakh crore.
Inflation continues to be high
Over the past decade, India’s inflation has exhibited variability, influenced by factors such as food prices, global economic conditions, and domestic demand. In 2014, the inflation rate was 6.6%, which decreased to 3.3% in 2017, reflecting effective monetary policies and favorable economic conditions. However, by 2020, inflation rose to 6.6%, driven by supply chain disruptions and increased food prices. In 2022, it further escalated to 6.7%, before slightly declining to 5.6% in 2023.
A significant contributor to this inflationary trend has been the volatility in food prices, often exacerbated by erratic weather patterns affecting agricultural output. For instance, in July 2023, abnormal monsoon rainfall led to a sharp increase in food prices, notably tomatoes, causing inflation rates to spike.
The real growth of India may be less than what we see as GDP Growth, as the data on which this is calculated is neither comprehensive not accurate, and the current growth rate is grossly inadequate for India’s sustenance and coming out of the Lower-middle-income country status.
Growth continues to be low
India’s average GDP growth rate over the past decade (2013–2023) has been approximately 5.5%–6.0% per year.
The above analysis presents an overview of the current situation in Bharat, and this is what we need to consider planning for Viksit Bharat.
In 2020, i wrote a detailed analysis about how to Make India a Developed Country in the next 25 years. We need a GDP growth between 13.3 – 16% to achieve the vision of Developed Country by 2047. This book has the Vision, Data and Plan for making India a developed country. This book was released by Dr. Mohan Bhagwat ji in August 2020. Listen to what he spoke about this book https://www.youtube.com/watch?v=ZIgVaN5VLjk&pp=ygUjTW9oYW4gYmhhZ3dhdCByYWplbmRyYSBwcmF0YXAgZ3VwdGE%3D
We stand at a critical juncture on our journey toward becoming a developed nation (Viksit Bharat) by 2047. We need grow at double digit to achieve a developed nation status by 2047 and we just have 22 years.
The current economic model needs a total transformation. We are creating a pathway for Viksit Bharat and will build upon the strategic framework we released in 2021 and 2022. We have so many opportunities to work upon, and I look forward to engaging with you on this important mission mode project.
It is our country, and we have to work together to reverse the situation. I look forward to working with you to fast-track India’s march into Viksit Bharat.
Wish you a great year ahead.
Dr. Rajendra Pratap Gupta, PhD
Founder
Viksit Bharat Abhiyan
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