Amit Pandey
India’s economic situation has reached a perilous state, as reflected in parliamentary debates and recent data. The most haunting and terrifying aspect of this crisis is India’s ballooning international debt. The country has borrowed a staggering 196 lakh crore from international organizations, with projections indicating that this will rise to 200 lakh crore by March 31, 2026. This is a drastic increase from the mere 56 lakh crore in March 2014. If the government’s flagship initiatives, such as “Make in India” and “Made in India,” have truly achieved success in fostering entrepreneurship and industrial growth, then what necessitated such an unprecedented level of borrowing? This raises fundamental questions about the actual impact of these policies and the broader economic strategy of the government.
Another alarming issue is the consistent depreciation of the Indian rupee against the US dollar, despite claims of economic growth. While other global currencies like the British pound have maintained relative stability, the Indian rupee has continued to weaken. In 2014, the rupee traded at approximately 70 per US dollar, whereas today, it has crossed 87 per US dollar. In contrast, the British pound has sustained an exchange rate of around 1.24 per US dollar, reflecting a stable economic outlook. If the Indian economy were genuinely witnessing the rapid growth claimed by the government, why has the rupee continued to decline? This currency depreciation undermines India’s purchasing power, making imports costlier and contributing to inflation. Despite various economic policies and government rhetoric, the rupee’s consistent fall signifies deeper structural problems that demand urgent attention and critical evaluation.
Beyond currency depreciation, the question of per capita income further complicates India’s economic narrative. Who exactly has benefitted from the economic policies of the current government? Has the increase in per capita income been equitable, or has wealth concentration intensified? While India’s GDP has grown, the distribution of this wealth remains highly skewed. Reports indicate that income disparity has widened, with a significant portion of the population still struggling to meet basic needs. Can a growing GDP alone be considered a mark of national pride when a substantial percentage of the population remains economically vulnerable? Furthermore, if economic growth were genuinely inclusive, why do nearly 80 crore Indians still rely on government-subsidized ration schemes? The sheer scale of dependency on welfare programs contradicts the government’s claims of economic prosperity and self-reliance.
Another critical question revolves around the government’s borrowing strategy. What are the concrete plans for repaying these loans? If the borrowed funds are not effectively utilized to generate sustainable revenue, how will the government manage repayments without plunging the country into a deeper financial crisis? The consequences of failing to repay such enormous debts could be catastrophic, leading to potential downgrades in India’s credit rating, reduced investor confidence, and heightened economic instability. Given the alarming trajectory of borrowing, one must ask whether the government has a clear roadmap for economic sustainability or if it is merely postponing an inevitable fiscal disaster.
In light of these economic challenges, a pressing concern emerges: what kind of future does this government envision for India’s youth and future generations? If debt levels continue to rise unchecked, what opportunities will remain for young Indians seeking financial stability and growth? Where will Indians find the means to sustain themselves in an economy burdened by excessive debt, currency depreciation, and growing inequality? These questions demand rigorous analysis, transparent answers, and a comprehensive strategy to address the fundamental weaknesses plaguing the Indian economy today.
Escalating International Debt:
India’s external debt is projected to reach a staggering 200 lakh crore by March 2026, a sharp increase from 196 lakh crore in recent years. While the government claims that this borrowing is essential for infrastructure and welfare programs, the unchecked rise in debt has raised alarms among economists and policymakers. Former RBI Governor Raghuram Rajan cautioned, “High levels of debt can constrain future economic growth and limit the government’s ability to respond to economic crises.” The mounting debt begs a critical question: How does the government plan to manage these liabilities without jeopardizing the economic future of millions of Indians?
Opposition leaders have been vocal about their concerns regarding the debt burden. Congress MP Rahul Gandhi questioned the government’s financial policies, stating, “If schemes like ‘Make in India’ were truly effective, why does the government continue borrowing at such alarming rates?” The Modi administration, however, has defended its borrowing strategy, with Finance Minister Nirmala Sitharaman arguing, “These funds are investments in the country’s future, aimed at infrastructure development, employment generation, and social welfare.”
While government borrowing can serve as an economic catalyst, economists stress the importance of sustainability. Former Finance Minister P. Chidambaram emphasized, “Excessive borrowing without a clear repayment strategy leads to fiscal instability. The burden ultimately falls on taxpayers and future generations.” This raises a pressing concern: Is the government recklessly accumulating debt with no structured plan for long-term financial stability?
The Rupee’s Decline:
The Indian rupee has witnessed significant depreciation against the US dollar, from around 70 INR/USD in 2014 to 87 INR/USD in 2026. The depreciating rupee is not merely a statistical concern; it has profound implications on inflation, trade deficits, and overall economic confidence. Nobel laureate Amartya Sen noted, “A weak currency erodes purchasing power, making essential imports more expensive and triggering inflation.”
The government attributes the rupee’s decline to global economic uncertainties, yet opposition leaders argue that domestic policy failures are equally responsible. Former BJP leader Yashwant Sinha remarked, “If India’s economy is as robust as the government claims, why is the rupee consistently losing value? A weak currency reflects structural weaknesses that need urgent addressing.”
Comparisons with other nations paint a grim picture. The British Pound, despite global economic fluctuations, has maintained relative stability at 1 GBP = 1.2378 USD. Why has India, with its much-touted economic growth, failed to ensure similar stability for the rupee? The government’s reluctance to acknowledge the depth of the crisis further exacerbates concerns.
A weakening currency disproportionately affects the working class, as rising import costs translate into higher prices for essential goods. Yet, the government continues to focus on large-scale industrial projects while neglecting grassroots economic stability. The fundamental question remains: If the rupee continues its downward spiral, how will the average Indian sustain their livelihood in an increasingly expensive economy?
Who Really Benefits?
India’s per capita income has stagnated, lagging behind nations such as Bangladesh, raising serious concerns about the inclusivity of economic growth. While government figures boast of GDP expansion, a significant portion of the population remains excluded from its benefits. The Congress party’s economic report highlighted this disparity, stating, “Growth that does not translate into improved living standards for the majority is not true economic development.”
Former Finance Minister P. Chidambaram reinforced this point, arguing, “The rising inequality and stagnant wages are indicators that economic policies favor a select few while neglecting the larger population.” The government, however, dismisses these claims, with Prime Minister Narendra Modi stating, “Our policies have created jobs and empowered millions of entrepreneurs.” But where is the evidence that this growth has tangibly improved the lives of the majority?
A significant portion of the country still grapples with unemployment, stagnant wages, and rising costs of living. If economic growth is not reflected in increased incomes and better living standards, then who is truly benefiting from these policies? Opposition leader Rahul Gandhi pointedly remarked, “The government’s focus on corporate giants and industrialists has left the common Indian behind.”
If the government continues to prioritize policies that disproportionately benefit the wealthy, what kind of future does it envision for the younger generation? Without equitable economic distribution, India’s youth face a future of limited opportunities and increasing financial strain.
Investment or Economic Gamble?
The Modi government has consistently defended its borrowing strategy, emphasizing its role in infrastructure and welfare projects. However, critics argue that unchecked borrowing without a clear repayment strategy poses severe economic risks. Former RBI Governor Duvvuri Subbarao stated, “While borrowing can fuel growth, it must be managed prudently to prevent long-term financial instability.”
The opposition has raised concerns that the government’s financial policies are leading India toward a debt trap. Congress leader Mallikarjun Kharge criticized the borrowing strategy, stating, “The government is borrowing without a structured plan for repayment. This is a reckless financial gamble that future generations will have to pay for.”
The central question remains: If borrowing is indeed an “investment,” then where are the measurable results? Why is unemployment still high? Why has rural distress not significantly improved? Why has per capita income stagnated despite increased spending?
The government argues that infrastructure projects will yield long-term benefits, but critics highlight that these projects often favor large corporations rather than directly benefiting common citizens. The opposition further questions whether these investments are being made with transparency and efficiency.Even today, Supriya Sule, Member of Parliament from Maharashtra and a senior leader of the NCP (Sharad Pawar faction), raised serious concerns in Parliament over the government’s excessive borrowing without tangible results on the ground. She sharply criticized the fiscal approach, stating, “If the government’s economic policies are truly delivering growth, why does India need to borrow at an unprecedented rate? What kind of future are we preparing for the next generation if debt continues to spiral unchecked? Where is the roadmap for repayment, and how does the government plan to ensure financial stability in the years to come?”
Her remarks underscored the pressing need for accountability in fiscal planning, highlighting the growing disconnect between the government’s claims of economic progress and the grim reality of rising debt and depreciating currency.
If debt accumulation continues at this pace, what legacy is the government leaving for the next generation? What opportunities will be available for India’s youth if they are burdened with repaying astronomical loans? The government must answer a fundamental question: What kind of economic future does it envision for the nation?
India’s rising debt, depreciating rupee, stagnant per capita income, and borrowing strategy all point to deeper systemic issues that require urgent attention. While the government remains steadfast in its economic projections, opposition leaders, economists, and policy experts caution against reckless financial decisions that may jeopardize the country’s long-term stability.
As former Prime Minister Manmohan Singh wisely stated, “We must work together to build a resilient and inclusive economy that benefits all sections of society.” India stands at an economic crossroads—will the government course-correct and prioritize sustainable development, or will it continue on a path that risks financial instability for generations to come? The answers to these questions will determine the economic fate of millions of Indians in the years ahead.
( Author is Managing Editor of The Emerging World)
