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Three States accounted for more than 70% of UAPA cases registered since 2014
Sai Krishna Muthyanolla
November 11, 2021
Cases relating to ‘Sedition’ and those registered under the UAPA have been discussed widely in the last few years. Data indicates that the three states of Manipur, Jammu & Kashmir, Assam accounted for more than 70% of the cases registered under UAPA between 2014 & 2020. On the other hand, the nine states of Assam, Jharkhand, Karnataka, Haryana, Jammu & Kashmir, Bihar, Kerala, Uttar Pradesh, and Manipur accounted for more than 75% of the cases registered under Sedition.
Recently, the Tripura Police charged lawyers and social media handles under the anti-terrorism law, Unlawful Activities (Prevention) Act, 1967 (UAPA). The social media handles were booked for making posts, which according to the police, had the ‘potential to flare up communal tension’ in the state. Besides, there have been numerous discussions surrounding the legislations of UAPA and Sedition law in India for the past few years, on the utility and use of these laws. Even the Supreme Court, earlier this year, expressed concern over the misuse of the sedition law- Section 124A of the Indian Penal Code (IPC)  which was framed in the colonial era. The court asked the Union government why the law should not be struck down while hearing a petition filed by a retired Army general, challenging the constitutional validity of Section 124A (sedition) of the IPC.
Comprehensive information on ‘Offences Against the State’ published by NCRB since 2014
As per the information provided in the National Crime Records Bureau (NCRB), offences against the State include those crimes under both IPC and Special & Local laws which involve criminal activities that are directed against the existence of the state itself such as treason, sedition and rebellion. Sedition (Section 124A) is a crime under IPC while UAPA falls under the category of ‘SLL Crimes’ in the annual Crime in India report released by the NCRB. There are other provisions such as sections 121, 121A, 122, 123, 153A and 153B of IPC, the Prevention of Damage to Public Property Act, The Official Secrets Act, etc., the cases under which are also reported under ‘offences against the State’. The NCRB report began publishing comprehensive information on ‘Offences Against the State’ only since 2014.
Cases under ‘Offences Against the State’ reduced since 2017
According to the NCRB Crime in India (CII) report, a total of 5,613 cases of ‘offences against the State’ were registered by police across the country in 2020 alone. This includes 796 cases under UAPA and 73 cases under Sedition. However, this number is the least since 2015. The number of registered cases of ‘offences against the state’ increased from over 5,000 in 2014 to more than 9,000 cases in 2017- an increase of nearly 67% in three years. However, since 2017, the number of cases has been reducing. The number in 2020 is the lowest since 2015.
During the seven-year period (2014 to 2020), the cases registered under UAPA, and Sedition together constituted nearly 15% of all the cases registered under this head. Of the total 49,000 odd cases registered during this period, a total of 6,900 cases were registered under UAPA and 399 cases were registered under Sedition.
An average of 986 cases under UAPA & 57 under Sedition registered annually since 2014
An average of 986 cases were registered under UAPA and 57 under Sedition, annually since 2014.  While the number of cases under UAPA went up from 897 in 2015 to more than 1200 in 2019, the number dropped to below 800 in 2020, the year of the pandemic. This reduction is in line with the overall reduction in the number of crimes reported in the country. Meanwhile, the number of cases registered under Sedition crossed 50 in 2017 and touched the highest of 93 cases in 2019 and subsequently dropped to 73 in 2020.
Three states account for more than 70% of cases registered under UAPA
Of the total 6,900 cases registered during 2014 & 2020 under the UAPA, Manipur accounted for the highest number of cases with 2,595 accounting for almost 38% of such cases. Jammu & Kashmir is next in line with 1,208 cases followed by Assam with 1,071 cases. The three states which were the only ones to have reported more than 1,000 cases each accounted for nearly 71% of the cases registered in the country. Jharkhand, Uttar Pradesh, Tamil Nadu, Bihar, and Kerala were the other states which reported more than 100 cases each. These five states along with Assam, Jammu & Kashmir, and Manipur, accounted for more than 95% of the cases registered in India. Numbers clearly indicate that more such cases are registered in the Northeastern states. Large states of Maharashtra, Rajasthan, Haryana, and Telangana had fewer than 10 cases registered under UAPA during the seven-year period of 2014 & 2020.
Between 2014 & 2020, the number of cases registered under UAPA in Manipur dropped from 630 in 2014 to 169 in 2020, a decrease of 73%. Assam witnessed an increase in cases from 148 in 2014 to 308 in 2018 which fell to 87 in 2019. Meanwhile, in Jammu & Kashmir, the number of cases gradually went up from 45 in 2014 to 287 in 2020, marking a 6-fold increase during this period.
9 states accounted for more than 75% of the cases under Sedition between 2014 and 2020
Under the sedition law, Assam reported the greatest number of cases (66), followed by Jharkhand (40), Karnataka (38), and Haryana (37) during the seven-year period of 2014 to 2020. These four states, along with Jammu & Kashmir, Bihar, Kerala, Uttar Pradesh, and Manipur accounted for 76% of the 399 cases registered under Sedition in all of India between 2014 and 2020. On the other side, Maharashtra and Punjab reported only one case each under sedition during this period.
The state-wise trend indicates that in Assam, 65 of the 66 cases were registered after 2016. Similarly, 25 of the 27 cases in Jammu & Kashmir, and 20 out of 21 cases in Manipur were registered after 2017. Though Bihar is among the top 6 states with the most sedition cases, the 25 cases registered in the state were in 2014 and 2015 only. No cases under sedition have been registered since then.
82% cases under sedition and 85% under UAPA were pending disposal by police by end of 2020
The pendency of all IPC crimes with the police was about 38.2% by the end of 2020 and 29.2% by the end of 2019. On the other hand, the percentage of cases registered under ‘offences against the state’ pending police disposal was the highest by the end of 2020 at 60.8% while it was 54.3% by the end of 2019.  In other words, the police disposal of cases registered under ‘offences against the state’ was much lower compared to the other IPC crimes.
As far as sedition cases are concerned, 82.2% of the cases were pending with the police by the end of 2020 which was 69.4% by the end of 2019. For cases registered under UAPA, the pendency at the police was close to 90% by the end of 2016 which reduced to 76.5% in 2018 and increased to 85% by the end of 2020.
Pendency of Sedition & UAPA cases with the Courts crossed 90% by the end of 2020
The pendency of cases with the courts, registered under sedition was above 91% by the end of 2016 which reduced to 74.1% by the end of 2019. However, by the end of 2020, the pendency with courts increased to 94.5%. During the same period, the percentage of cases pending with the courts & registered under UAPA reduced from 97.8% by the end of 2016 to 88.4% by the end of 2019. However, as with other heads, the pendency of these cases with the courts increased to 94.6% by the end of 2020. In other words, only 5.5% of the cases under sedition and 5.4% cases under UAPA that were up for trial were disposed in 2020. This is in line with the court pendency all IPC crimes of 93.8%
Both Sedition law and UAPA have been widely critiqued
The Sedition law and UAPA have been criticized by many for being draconian and stringent, with scope for misuse. The sedition legislation was brought in during the colonial rule to stop activities of Indians who would otherwise criticize or raise their voice against British rule. Thus, the relevance of the sedition provision in the present day has been questioned by many. In 2018, the Law Commission of India released a consultation paper on sedition, inviting public feedback. The committee noted that the law penalizes anyone who attempts to bring hatred or disaffection towards the government, which needs to be debated in an independent and democratic nation. Further, in the 1962 case of Kedar Nath Singh vs. State of Bihar, the Court held that the law was to punish subversion of a lawfully established government through violent means only. Likewise, the UAPA has also been criticized for enabling the State to arrest an individual and making it difficult to get bail.
Featured Image: Sedition and UAPA cases

created: November 11, 2021


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Data: Till date, four states received about 42% of the total GST Compensation released by the Central Government
Sai Krishna Muthyanolla
August 3, 2020
The recent remarks of the finance secretary that the central government may not be able to pay the GST compensation to the states in the wake of the economic crisis created quite a stir. Data of the last three years indicates that four states of Karnataka, Maharashtra, Gujarat & Punjab received about 42% of the total GST compensation cess released till date.
The Central Government has recently, on 27 July 2020, released the GST compensation pending to the states for March’2020. This amounted to a total of ₹ 13.8 thousand crores and with this payment, the entire compensation due to the states for the year 2019-20 has been released by the Centre.
Why does the Centre pay GST Compensation to States? How is the amount of compensation decided and how does the centre finance the compensation due to states? In this story we take a look at Centre’s GST Compensation to the States and look at trends over the last three years since GST came into effect.
Compensation is paid to States for any loss of revenue due to implementation of GST
The provisions of Goods & Services Tax Act (GST) came into force from 01 July 2017, with an intention to implement a simplified, self-regulating and non-intrusive indirect tax compliance regime.
At the Central level, Service Tax, Custom Duties, Central Excise (except for products of Petroleum & Tobacco) etc. were subsumed by GST. Since GST is a consumption-based tax, it was believed that manufacturing states might tax revenue. Therefore , to compensate for the loss of revenue, The Goods and Services Tax (Compensation to States) Act, 2017 was passed.
For the purpose of calculation of GST Compensation to be paid to the states:
Provisional Compensation is required to be calculated every two months on pro-rata basis and paid to the states. Adjustment for any over-payment or under-payment is done in the subsequent months or in few instances in subsequent financial years once the official audit is done.
Provision for levy and collection of Cess for GST compensation
Section 8 of GST (Compensation to States) Act -2017, provides for levying of Cess on Intra-state and Inter-state supply of Goods & Services, for the purpose of providing compensation to the States, for any loss of revenue due to the implementation of GST. The time provision for collection of this levy is initially proposed to be for 5 years, which can be reviewed by the GST council.
Central Government based on the recommendations of GST Council has levied varied GST Compensation Cess rates of different Goods & Services. The initial notification with this schedule of tariffs was released on 28June 2017. There have been subsequent changes made for few of the items in due course.  GST Cess is levied on the transactional value in addition to GST.
Section -10 of GST (Compensation to States) Act- 2017, states that the proceeds of the cess levied would be credited to Goods & Services Tax Compensation Fund, which is a non-lapsable fund.
The compensation amount that is paid to the states is paid out of this fund. The act further states that if there is any amount remaining unutilized at the end of the GST transition period, 50 % of the same shall be transferred to the Consolidated Fund of India and the balance to be distributed among States & UTs as per the ratio of their GST revenues.
Marginal Increase in the GST Compensation Cess collected in FY 2019-20
A total of ₹ 2.31 lakh crores of GST Compensation Cess are collected so far i.e. from July’2017 to March’2020. At the end of the first financial year after the rollout of GST, the amount of GST Compensation cess collected amounted to ₹ 58.3 thousand crores.
In the next Financial Year (2017-18), which is the first full financial year in GST regime, the GST compensation cess collection increased by 54% to reach ₹ 87.2 thousand crores. There was only a marginal increase in the collection of cess in 2019-20 with a collection of ₹ 95.3 thousand crores.
Over this 3-year period, the highest GST Compensation Cess was collected from Uttar Pradesh, totalling to ₹ 32.6 thousand crores followed by Maharashtra with ₹ 30.5 thousand crores.
Karnataka, Tamil Nadu and Telangana complete the top-5 states with the highest cess collection for the period 2017-20.
Punjab & Kerala are among the states with lower GST Compensation Cess collection along with most of the NE states and UTs.
Maharashtra received the highest GST Compensation for 2019-20 followed by Karnataka
A total of ₹ 1.65 lakh crores are released as GST compensation to the states for 2019-20. As per the information provided in an official Press Release, apart from the GST Compensation Cess for 2019-20 and the arrears from previous years, the government has transferred ₹ 33.41 thousand crores from Consolidated Fund of India to release GST compensation to the states. This transfer from Consolidated Fund of India was done as part of an exercise to apportion balance of IGST pertaining to 2017-18.
Among the states, Maharashtra has received the highest amount of GST compensation for 2019-20 with ₹ 19.23 thousand crores. Another traditional high revenue state, Karnataka received ₹ 18.62 thousand crores as GST Compensation. These two states are also among the states which have collected the highest GST Cess.
Gujarat, Tamil Nadu & Punjab make up the rest of top-5 States followed by U.P, Delhi & Kerala in the list of states that received the highest GST compensation for 2019-20.
With the exception of Assam & Tripura, the North-Eastern states have not received any GST Compensation.  Jharkhand, Andhra Pradesh & Telangana are among the comparatively larger states which have received less GST compensation.
Karnataka has received the highest GST Compensation till date
GST Compensation released to States for 2019-20 was more than double the amount released for 2018-19. For  2019-20 a total of ₹ 1.65 lakh crores were transferred, while it was only ₹ 81.8 thousand crores in 2018-19.
The highest GST Compensation  till date (from July’2017 to March 2020) was released to Karnataka, amounting to ₹ 38.7 thousand crores, of which around 18 thousand crores were released for 2019-20.
Meanwhile, Maharashtra received the second highest GST compensation with ₹ 31.67 thousand crores. Similar to Karnataka, a major portion of this i.e. 19 thousand crores were received in 2019-20. Around ₹ 12 thousand crores were transferred during June’19-Nov’19 in three instalments.
Uttar Pradesh, which did not receive any compensation for 2017-18, has received nearly 79% of its total compensation so far in 2019-20.
Across the board, the same trend is observed, where in the states received higher GST compensation in 2019-20 compared to previous years, with most of the states having received proportionately double the amount, largely on account of the economic slowdown coupled with COVID-19 crisis that has severely affected tax collections.
Economic Slowdown could have a serious impact on Centre’s commitment towards GST compensation
Although there is a near double increase in the GST compensation payment for 2019-20, there has been extreme delay in the payment of this compensation. The payment due for 2019-20, was paid 4 months into the next financial year. Meanwhile there are allegations from opposition ruled states that the Centre is delaying the GST dues, thereby impacting State-level Schemes.
In an earlier story, we had observed that ‘State’s Own Tax Revenues’ (SOTR), GST & Sales tax form the major component of State Revenues. In the same story, we have also observed that there is a short fall in the amount being devolved by the Centre to the states. This creates enormous fiscal strain on the states who have their own budgetary expenses.
The CAG Report on GST indicated short fall in the GST collection compared to the estimates. As per the available data on GST portal, there hasn’t been any significant improvement in GST collections for 2019-20. The Total GST collections (CGST+ SGST+ IGST+ Cess) was around ₹ 9.44 lakh crores in 2019-20, compared to that of ₹ 8.76 lakh crores the previous financial year of 2018-19 i.e. an increase of only around 8%.
In view of the impending economic slowdown due to COVID-19, the situation does not look promising. Along with Centre, even the states are staring at a substantial fall in their SOTR and GST revenues.
As per few news reports, Finance Secretary Ajay Bhushan Pandey has said before a parliamentary panel that the central government would not be able to pay the GST Compensation for any shortfall at the current rates of 14% per annum. Any attempt towards reworking on this formula in the wake of lower GST collections, could affect the idea of GST framework itself.
The recent reported remarks by the Attorney General of India that the Centre is not obliged to pay for GST Compensation shortfall, created more ambiguity on the course of action the Centre would pursue to compensate the states in 2020-21.

source: news-factly

created: August 3, 2020

license: Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/

author: Sai Krishna Muthyanolla


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To reach 20 million tonnes of Fish production by 2022-23, the current growth rate needs to double
Sai Krishna Muthyanolla
June 16, 2020
Through the Atmanirbhar package, the government announced schemes for various sectors. One of these is the ‘Pradhan Mantri Matsya Sampada Yojana (PMMSY)’ through which the government aims to increase the fish production to 20 million tonnes by 2022-23 which currently stands at 13.4 million tonnes in 2018-19. To reach the government’s target by 2022-23, the current annual average growth rate needs to double.
Indian peninsula is home to millions of people who are dependent on fisheries for their livelihood. Besides being a source of livelihood to millions, the sector contributes immensely to food production, employment generation, and earning foreign exchange. Over the last few years, the industry has made rapid strides. It is an inexpensive source of nutritious food and like the agricultural sector, fisheries sector too has traditionally been a contributor to socio-economic development of the country.
COVID-19, which has left no sector untouched, has affected the fisheries sector too, and as a part of the Atmanirbhar package, the Central Government has announced a new scheme by name ‘Pradhan Mantri Matsya Sampada Yojana (PMMSY)’ with the objective to bring about ‘integrated, sustainable, inclusive development of marine and inland fisheries.’ This scheme was originally announced in the 2019-20 budget.
Department of fisheries was created in 2019
A separate ministerial portfolio, Ministry of Fisheries, Animal Husbandry, and Dairying was created in 2019 by the central government, with two separate departments- department of fisheries and department of animal husbandry & dairying to focus on livestock and fisheries in the country. The main role of the department is promotion of policies and strategies aimed at the sustainable and responsible development of fisheries and aquaculture in both inland and marine waters. Inland fisheries and aquaculture are the main components of the fisheries sector in India whose production is more than twice that in marine fisheries. The geographical diversity in India is also ideal for both marine and inland fisheries, thereby making it one of the lead producers of fish globally. India’s coastline extends over 8,118 kilometres with an Exclusive Economic Zone of 2.02 million square kilometres. The total area covered by inland water bodies is 73.59 Lakh hectares, almost two times the size of the state of Kerala.
As per available government data, the contribution  of fisheries to Gross Value Added (GVA) is ₹ 1,33,492 crores in 2016-17, which is around 1% of the GVA. The export value of fisheries in 2017-18 was ₹ 45,106 crores. Fish production stood at 13.4 million tonnes in 2018-19.
Mission blue revolution is an umbrella scheme that brings together different existing schemes in the sector to boost production and extend financial support
Recently, the government announced Pradhan Mantri Matsya Sampada Yojana as a part of the Atmanirbhar package. Even before this, the central government has been implementing various schemes and allocating funds for the development of the sector. A centrally sponsored scheme was rolled out in 2015 for five years (up to 2019-20), by the NDA Government by merging all the ongoing schemes under an umbrella known as Blue Revolution: Integrated Development and Management of Fisheries. Through Mission Blue Revolution, the government plans to focus on enhancing fish productivity, by increasing fish production at a growth rate of 6% to 8% and create necessary infrastructure.  The major components of the umbrella scheme include:
Target of 20 million tonnes by 2022-23
In October 2018, the government launched the Fisheries and Aquaculture Infrastructure Development Fund (FIDF) to meet the infrastructural requirements in the sector. The target set was to produce 15 million tonnes by 2020 by supporting Blue Revolution. FIDF also aims to achieve a sustainable growth of 8% to 9% to increase India’s fish production to 20 million tonnes by 2022-23. Under FIDF, a corpus of ₹10,000 crores was announced in the Union Budget in 2018. An estimated fund size of Rs 7522.48 crore comprising of Rs 5266.40 crore was to be raised by the Nodal Loaning Entities (NLEs), Rs 1316.6 crore through beneficiaries’ contribution and Rs 939.48 crore budgetary support from Government of India. Furthermore, the government also extended the facility of Kisan Credit Card to fisherfolk for meeting their short-term working capital requirements.
Overall fish production increased by over 38% in six years
In the last six years, both inland and marine fish production has witnessed an increase, resulting in a net increase in the total fish production. Inland fishes contribute to almost two-thirds of the net fish production in the country. While the marine fish production in India increased by 7.75% in the span of six years, the inland fish production increased by 58.2%. The data for 2018-19 is provisional, according to Lok Sabha answer given in February 2020. The overall fish production increased by around 38.5% in these six years.
Annual average growth rate is only 6.8%
Though the government has aimed at a stable increase of around 8% in annual fish production, under blue revolution mission, the average annual growth rate stands at 6.8% for the last six years. The annual growth dropped to below 5% in 2015-16 and touched the highest of 10.2% in 2017-18. If we are to reach the target of 20 million tonnes of fish production by 2022-23, the current annual average growth rate needs to double to around 13.2% per year.
Andhra Pradesh accounts for more than a quarter of India’s fish production in 2017-18
State wise data in 2017-18 shows that the best performing states in terms of fish production are Andhra Pradesh, West Bengal, Gujarat, Odisha, Tamil Nadu, Uttar Pradesh and Maharashtra, in the same order. There has been a continuous increase in fish production over the past five years from 2013-14 to 2017-18, in each of these states. Even though the production is second highest in West Bengal, the production is almost half of that in Andhra Pradesh which accounts for the largest production in India. Andhra Pradesh accounted for 27% of the fish production in India in 2017-18. Odisha overtook Tamil Nadu in production only in 2017-18. Production in Andhra Pradesh and Odisha have increased by 71% and 65% over the six-year period, the highest percentage increase among the states that have been compared here
PMMSY was announced in the 2019-20 budget speech
Finance Minister had proposed the Pradhan Mantri Matsya Sampada Yojana (PMMSY) scheme in her union budget for 2019-20. It was later announced in the Atmanirbhar package and approved by the cabinet. Through this scheme, the government aims to harness the potential of fisheries in the country in a sustainable, responsible, inclusive, and equitable manner. Like in the case of agricultural sector, this new scheme is aimed at doubling fishers’ and fish farmers’ income, as per government’s scheme information. This scheme is claimed to be the highest investment in fisheries sector by a government at ₹ 20,050 crores. The Central share is ₹ 9407 crores while state’s share is ₹ 4880 crore and Beneficiaries contribution is ₹ 5763 crores. The scheme was brought about to address the critical gaps in fish production and productivity, quality, technology, post- harvest infrastructure and management, modernization of the sector, and also for the welfare of the fishers.
It is also an umbrella scheme with two components
PMMSY has two components- Central Sector Scheme and Centrally Sponsored Scheme. Under the Central Sector Component, an amount of ₹1,720 is earmarked while under the Centrally Sponsored Scheme, an amount of ₹18,330 crores has been envisaged- which is further segregated into non-beneficiary oriented and beneficiary oriented activities grouped under three categories- (i)for enhancing production and productivity, (ii) infrastructure and post- harvest management, and (iii) fisheries management and regulatory framework. The scheme will be implemented over five years from 2020-21 to 2024-25.
While the PMMSY might be able to augment infrastructure and provide the much-needed funding, achieving the target of 20 million tonnes by 2022-23 seems like a tall order.
Featured Image: Pradhan Mantri Matsya Sampada Yojana


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Data: Total Expenditure of the Union Government up 31% in 2020-21
Sai Krishna Muthyanolla
June 15, 2021
The impact of COVID-19 on the government revenues was visible with the decrease in various tax revenues except for excise duties & customs. At the same time, the expenditure of the government increased significantly in the pandemic year due to the various measures & schemes announced to support the poor & vulnerable.
While presenting the Union Budget for 2021-22, the Government of India increased the Revised Estimates (RE) for Total Expenditure in 2020-21 by 13% compared to the Budget Estimates (BE). The Budget Estimate for Total Expenditure was Rs. 30.4 lakh crores, which is revised (RE) to Rs. 34.5 lakh crores.
In the previous year i.e 2019-20, the RE of ‘Total Expenditure’ was less than the BE. The year before, there has only been a minor increase in RE compared to BE. As such, the increase of 13% in the RE for 2020-21 assumes significance and reflects the impact of the COVID-19 pandemic. The government had to spend more because of the pandemic and had to offer aid & assistance to the poor & vulnerable sections of society. This might have led to the increased expenditure in 2020-21 compared to the initial BE.
In an earlier story, we highlighted the fall in Government revenues during 2020-21 and the prevailing trend of the slow growth of Tax revenues even before the pandemic began.  In this story, we explore the trends in Government expenditure over the last few years and also understand the impact of COVID-19 on government spending.
As was the case for Revenue figures, even the actual expenditure figures for 2020-21 will only be known later during the presentation of the 2022-23 budget. This story is based on the provisional figures for 2020-21 as available on the website of the Controller General of Accounts (CGA).
Total Expenditure of the Union Government increased by 31% in 2020-21
As per the provisional figures provided by CGA, the ‘Total Expenditure’ of the Union Government for 2020-21 is Rs. 35.11 lakh crores. This is higher than the RE presented by the government during the Union Budget for 2021-22.
In 2019-20, the ‘Total Expenditure’ of the Union Government was Rs. 26.8 lakh crores i.e the provisional total expenditure for 2020-21 increased by around 31%. A month-on-month comparison between 2019-20 & 2020-21, shows that since October 2020, government expenditure for 2020-21 is higher than the corresponding month in 2019-20. Especially, the provisional figures for March 2021 are Rs. 6.92 lakh crores compared to the Total expenditure of only Rs.2.21 lakh crores in March 2020.
During the first half of 2020-21, the month-on-month total expenditure was less than the corresponding months in 2019-20 in May, August & September. However, in the later months, the expenditure during 2020-21 was higher than in 2019-20.
While the increase in the expenditure during 2020-21 compared to 2019-20 is remarkable, this increasing trend exists even prior to 2020-21 but to a lower extent. After a fall in the ‘Total Expenditure’ during 2016-17, there has been a consistently increasing trend with year-on-year growth.
Increase in both Revenue & Capital Expenditure of the government during 2020-21
The ‘Total Expenditure’ of the Government can be broadly classified into ‘Capital Expenditure’ & ‘Revenue Expenditure’.
Revenue Expenditure:
The revenue expenditure includes all the expenses involved in running the Government, providing various services, interest payments, subsidies, various schemes, etc. This expenditure does not result in the creation of assets for the government. Out of the ‘Total Expenditure’, the revenue expenditure of the government forms the major part.
The trends in revenue expenditure thus have a large bearing on the total expenditure trends of the government. The increase in the total expenditure over the years, and especially in 2020-21 can be attributed to the steep increase in revenue expenditure.
In the year 2020-21, the provisional revenue expenditure is Rs. 30.86 lakh crores. This is 31.2% higher than the revenue expenditure incurred by the ‘Government of India (GoI)’ in 2019-20. While the increase in the revenue expenditure in 2020-21 can be attributed to the expenditure that the government had to incur in face of the COVID-19 pandemic, the increase was visible even in 2019-20.
During 2016-17 & 2017-18, the share of revenue expenditure was 96% and 94% respectively out of the ‘Total Expenditure’, which in general is in the range of 85-90%.
Capital Expenditure
Capital expenditure is any expenditure that results in the creation of assets for the Government of India. Compared to revenue expenditure, the proportion of capital expenditure is lesser in the total government spending. Similar to Revenue expenditure, there has been a considerable increase in the capital expenditure incurred for 2020-21, compared to 2019-20. With an expenditure of Rs. 4.24 lakh crores in 2020-21, which is 27% higher than the previous year. While in terms of the amount, the capital expenditure in 2020-21 is the highest whereas 2015-16 recorded the highest growth in capital expenditure in over 10 years with a 28.6% increase.
The trends of growth rate have not been consistent for Capital expenditure.
For most of the months in 2020-21, Revenue Expenditure is higher than in 2019-20
A significant increase in the provisional ‘Total Expenditure’ in March 2021 compared to the same month in 2019-20 can be attributed largely to the increase in revenue expenditure during that month. In March 2020, the revenue expenditure was Rs. 1.9 lakh crores, whereas during March 2021, the provisional numbers reported by CGA indicate a revenue expenditure of Rs. 6.7 lakh crores, which is more than thrice the March 2020 amount. There is no detailed breakup available on the CGA website for March 2021 revenue expenditure figures to understand the reasons behind such a steep increase.
The higher expenditure during March 2021 is in continuation of the trend observed since November 2020. In addition to the last five months of 2020-21, the revenue expenditure during April, June & July of 2020 is higher during 2020-21, compared to the same months in 2019-20.
The expenditure summary presented as part of the 2021-22 budget, provides some insights on the steep increase in revenue expenditure for 2020-21.
As per the document, a significant contributor to this is the increase in 2020-21 is the increased expenditure for ‘Central Sector schemes’, compared to the initial BE for that year. The RE for Central Schemes was Rs. 8.7 lakh crores compared to BE of Rs.4.97 lakh crores. This is also significantly higher than the actual expenditure incurred in 2019-20 for ‘Central Sector Schemes’.
This may be due to the various schemes & support measures announced by the government of India to provide relief from the COVID-19 pandemic. The comparative higher Revenue expenditure in April, June & July months coincide with the relief measures announced during the lockdown period. The higher expenditure in the later months can be attributed to the implementation of the various schemes and the continued support in the wake of the pandemic.
However, the figures reported for 2020-21 are provisional. The extent of the actual spending on ‘Central Sector Schemes’ & the overall expenditure incurred will only be known much later.
Significant increase in the amount of ‘Loans’ disbursed during 2020-21
Loans disbursed by the ‘Union Government’ form part of its capital expenditure. As highlighted earlier, although capital expenditure accounts for a lesser proportion of the total government spending, there has been a significant increase even in this for 2020-21.
A part of this increase can be attributed to the ‘Loans’ disbursed by the Central Government. As per the information provided on the CGA website, the provisional value for the number of loans disbursed in 2020-21 is Rs.1.1 lakh crores, compared to around Rs. 24.2 thousand crores in 2019-20. In other words, the loans disbursed by the GoI increased by more than 4 times in 2020-21.
As in the case of ‘Centrally Sponsored Schemes’, even this increase in loans disbursed can be attributed to COVID-19 relief efforts of the Central Government. Monthly data indicates that the majority of these loans disbursed was during the last five months of the year i.e November 2020 to March 2021.
CGA also provides the data of the revenue expenditure incurred by the Government in the form of interest payments for outstanding debts. While there is an increase in the interest payments for 2020-21, the increase has not been significantly different from the trends in previous years.
Therefore, the share of interest payments in revenue expenditure fell from 26% in 2019-20 to 22% in 2020-21, indicating higher revenue expenditure in other areas. However, the GoI borrowed significantly in 2020-21 to meet the increased expenditure. Only the domestic market borrowings in 2020-21 were more than Rs. 13 lakh crores. Hence the interest payments on all these loans might contribute to the expenditure in 2021-22.
Impact of COVID-19 pandemic visible in the expenditure trends
The total expenditure of GoI has been significantly higher in 2020-21 compared to the previous years. This is understandable as the government had to spend higher amounts on new schemes & measures aimed at supporting the poor & vulnerable affected by the pandemic. At the same time, the government revenue did not increase at the same pace forcing the government to borrow from various sources to meet the expenditure. Since the pandemic is still affecting the country, its impact on spending & government revenue could be similar even in 2021-22.
Featured Image: Total Expenditure of the Indian Government


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Data: Total Extent of Land Degradation in India over 90 Million Hectares
Sai Krishna Muthyanolla
November 10, 2023
As per data published by the government, the total land degradation in the country was estimated at 91.30 million ha during 2005–2006, while it showed a marginal decrease to 91.21 million ha during 2015-16. This is about 27.77% of the geographical area of India. Three States of Rajasthan, Maharashtra, Jammu & Kashmir accounted for over 40% of land degradation area.
Land degradation is a pressing global issue with far-reaching consequences. It is considered a temporary or permanent impairment of productivity of land through deterioration of physical, chemical, or biological aspects. It spans various regions and is fueled by factors like deforestation, unsustainable agricultural practices, and climate change. The loss of fertile land not only affects food security but also increases the risk of natural disasters and contributes to the loss of biodiversity.
Recently, the UN Convention to Combat Desertification (UNCCD) announced the launch of its first-ever Data Dashboard compiling national reporting figures from 126 countries, including India. The dashboard was launched just days before the world leaders and experts would meet in Samarkand, Uzbekistan for the 21st session of the UNCCD Committee for the Review of the Implementation of the Convention (CRIC 21). In the session, the delegates will review global progress made toward land degradation neutrality (LDN) and confront issues like enhancing drought resilience, promoting women’s land rights, and combating sand and dust storms.
Globally, at least 100 million hectares (ha) of healthy and productive land lost each year between 2015 and 2019
The data from the dashboard revealed that between 2015 and 2019, the world lost at least 100 million hectares (ha) of healthy and productive land each year which would roughly make up twice the size of Greenland. It is also estimated to impact the lives of 1.3 billion people, who will be directly exposed to land degradation. It noted that land degradation is advancing at an astonishing rate across all regions.
Further, it revealed that there are significant disparities when it comes to the proportion of degraded land per region. Sub-Saharan Africa, Western and Southern Asia,  Latin America, and the Caribbean experienced land degradation at rates faster than the global average, it noted.
Eastern and Central Asia, Latin America, and the Caribbean regions experienced the most severe degradation, affecting at least 20% of their total land area, as of 2019. However, since 2015, the proportion of land degraded in Sub-Saharan Africa has increased from 6.7% to 14.63%, and in Western Asia and the Northern African region, the same has risen from 3.78% to 7.18%.
India’s total degraded land as of 2019 is equivalent to ten times the size of Belgium or 43 million football pitches
As far as India is concerned, the dashboard revealed that as of 2019, a total of 30.51 million ha of India’s total reported land was degraded, which is 9.45% of the country’s landmass was degraded. In 2015, 4.42% of the country’s landmass was degraded. For comparison, India’s total degraded land as of 2019 is equivalent to ten times the size of Belgium, or 43 million football pitches.  251.71 million people or nearly 18.4% of the country’s population, were exposed to land degradation during the same period.
At the national level, remote sensing data is being regularly employed in the survey of degraded soils by institutions like the ISRO, its partner institutions from state remote sensing centres, ISRO/ DOS centres and academia. Based on the mapping of land degradation for the whole land mass of India with data acquired during August to October (Kharif), November to March (Rabi) and April to May (Summer) of 2005–2006 and 2015–2016, a report was published by ISRO that helps in studying the decadal change in land degradation in the country. It also provides the category or cause of degradation. This data is sourced from Dataful.
According to ISRO’s report, the total land degradation in the country was estimated at 91.30 million ha during 2005–2006, while it showed a marginal decrease to 91.21 million ha during 2015-16. This is about 27.77% of the geographical area of India.
Wind and water erosion are the major causes of land degradation
As of 2015-16, water erosion is the major cause of land degradation in India accounting for 509.96 Lakh ha which is 55.91% of total land degradation and 15.53% of total geographical area (TGA). Wind erosion accounted for 142.8 Lakh ha contributing to 15.66% of total land degradation in India and 4.35% of TGA. Salinisation /alkalization was spread over 64.65 Lakh ha or 7.09% of total land degradation and Acidification in over 30.41 Lakh ha (3.33% of total land degradation). Paddy lands, dense forest areas and plantations have been excluded in this spatial extent.
Anthropogenic processes include industrial affluent areas, mining and dumps and brick kilns extends. These are spread over an area of 6.55 Lakh ha. Barren rocky, mass movement and riverine sands fall in the ‘others’ category and account for 12.13% of total land degradation.
Compared to 2005-06, there has been a substantial increase in the area under the anthropogenic category of land degradation while all the other categories saw a decline, though marginal.
3 states accounted for 43% of the total land degradation recorded in India
Among the states, Rajasthan had the maximum land under degradation with over 180.3 lakh ha accounting for 19.77% of the total land degradation in the country. Maharashtra had the second highest with 109.9 lakh ha of land under degradation accounting for 12.05% of the total. The erstwhile state of Jammu and Kashmir also had more than 100 lakh ha of land under degradation. Together, these three states accounted for 43% of the land under degradation in the country. Among major states, the area was less than 5 lakh ha in the states of West Bengal, Haryana, Kerala, and Punjab and was below 10 lakh ha each across all the northeastern states.
Cause of land degradation depends on geographical conditions as well as human actions
The cause of land degradation is seen to be dependent on geographical conditions as well as human actions. Water erosion was the dominant process resulting in land degradation in the majority of the states, especially in the central plateau region of India. This may be attributed to high rainfall variability and intensity, undulating terrain conditions and moderate to high erodibility of soils in these areas.
In the arid regions with less vegetation cover like Rajasthan, Ladakh, and Haryana,  wind erosion was predominant while acidification was mostly dominant in high-rainfall regions such as Manipur, Mizoram, Meghalaya, Tamil Nadu, Assam, Kerala, Odisha, and Maharashtra.
Waterlogging was significant in Bihar, Uttar Pradesh, and Assam while salinization/alkalization was dominant in Gujarat followed by Uttar Pradesh, Rajasthan, and Andhra Pradesh due to localized reasons. Land degradation due to anthropogenic activities was the highest in Karnataka, Rajasthan, Andhra Pradesh, and Telangana.
Efforts are being made to highlight the issue
Land degradation by itself or in combination with climate change, can have profound implications for natural resource-based livelihood systems, food security, economies, biodiversity, and the overall well-being of communities worldwide. It is a cause of concern and calls for concerted efforts to address the same. Land degradation is also a part of Sustainable Development Goal 15 which calls for reversing the same.
India, being a party to the United Nations Convention to Combat Desertification (UNCCD) has committed to attain land neutrality and restore 26 lakh hectares of degraded land by 2030. Further, India has implemented various initiatives to tackle land degradation, including the National Action Plan for Climate Change, Watershed Development Component of Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), afforestation programs like the Green India Mission, and sustainable land management practices. The Soil Health Card scheme aims to improve soil fertility, and watershed management projects focus on preventing soil erosion and promoting sustainable water use.

created: November 10, 2023


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Data: Total Wetland Area Increased by 4.2% Between 2006-07 and 2017-18. Comprehensive Data on Type of Increase is Not Available
Sai Krishna Muthyanolla
October 19, 2023
Wetlands generally encompass regions of land that are periodically or consistently inundated by water, or are saturated with water, making them integral to our environment and human well-being. The total wetland area in the country estimated is 15.98 million hectares (Mha), which is around 4.86% of the total geographic area of the country. Compared to 2006-07, the area of wetlands has increased by over 6.4 lakh hectares or 4.18%.
Wetlands generally encompass regions of land that are periodically or consistently inundated by water, or are saturated with water, making them integral to our environment and human well-being. They are recognized as some of the most productive ecosystems on Earth. They offer a multitude of benefits, including habitats for diverse flora and fauna, food production, carbon sequestration, flood mitigation, and groundwater replenishment. In addition to these ecological functions, humans are dependent on wetlands for transport, tourism, and even cultural and spiritual well-being. Further, Wetlands come in various types, each with its distinct characteristics and ecological functions, like swamps, mangroves, estuaries, ponds & lakes.
In India, the geographical and climatic diversity of the country contributes to the presence of diverse wetland habitats across the subcontinent, covering a substantial area of nearly 58.2 million hectares. Some of the popular wetlands in India are the Sundarbans (Mangroves) in West Bengal, Vembanad (lake) in Kerala, Dal Lake in Jammu and Kashmir, and Rann of Kutch in Gujarat (seasonal salt marsh).
While the usual discourse is surrounding Ramsar Sites, in this story, we look at how the area occupied by wetlands in the country has changed over time across states and different bio-geographic zones. We also look at some of the important measures taken by the government to preserve them. Data for the story has been taken from Dataful and MoSPI’s EnviStats. Those wetlands with an area of more than 2.25 hectares have been covered in the data as captured by Space-based observation of Indian wetlands.
Wetlands are defined in Envistats as areas of land that are either temporarily or permanently covered by water. These are neither truly aquatic nor terrestrial. It is possible that wetlands can be both at the same time depending on seasonal variability. These could be natural or man−made and found both in the inland and coastal areas.
The total wetland area in the country estimated is 15.98 million hectares (Mha), which is around 4.86% of the total geographic area of the country. A total of 2,31,195 wetlands, each having an area of more than 2.25 hectares have been mapped. Compared to 2006-07, the area of wetlands has increased by over 6.4 lakh hectares or 4.18%.
Man-made wetlands have increased over the years
The category-wise distribution of wetlands in India in 2006-07 and 2017-18 is mapped in the following chart. Wetlands are made by people for different reasons such as to prevent waterlogging, sewage treatment, ecological restoration, and irrigation. Some examples of man-made wetlands include the Ropar Wetland in Punjab and the Vaduvur Bird Sanctuary in Tamil Nadu. Manmade wetlands are bound to increase due to the development of soil and water conservation structures such as aquaculture ponds, reservoirs /barrages, tanks & ponds, etc. Meanwhile, most of the coastal wetlands are natural. While there has been an increase in man-made wetlands in inland & coastal areas by 12% and 27%, respectively, the natural coastal wetlands have shrunk by 2%.
70% of the wetlands are in 8 states
As of 2017-18, nearly 22% of the wetlands (by area) in the country were in Gujarat.  Andhra Pradesh, Maharashtra, West Bengal, and Uttar Pradesh accounted for around 7% each while Tamil Nadu, Madhya Pradesh, Karnataka, and Assam contributed 5% each. That is, nearly 70% of the wetlands by area were concentrated in these 8 states.
Over the decade, there has been considerable change in wetlands across almost all the states. The area has increased by 4.4% at the national level. Across states, Mizoram has recorded an increase of more than 41% and Tripura recorded an increase of nearly 30%. Among the large states, Maharashtra recorded the highest- 17.3% increase followed by Madhya Pradesh, Telangana, and Haryana by around 13%. On the other hand, the area in the states of Karnataka and Tamil Nadu has not changed much. Bihar and Punjab are the only two states which reported shrinkage- down by 3.8% and 2.8%, respectively.
Wetlands Area has reduced in Islands
Biogeographic zones are large regions with similar ecological and geographical features, categorizing Earth’s diverse ecosystems based on shared characteristics. The area of wetland has increased by more than 9% in the Western Ghats, 8% in the Northeast and 7% in the Deccan Peninsula. In the Himalayan and Semi-arid Regions, the increase is about 4% whereas it nearly touched 5% in the desert region. On the other side, the area has shrunk in the Islands by 6.6%.
75 wetlands are designated as Ramsar Sites
Considering the significance of wetlands, recognizing, and preserving their value is essential for sustainable development and the well-being of both ecosystems and societies. India is a signatory to the Ramsar Convention. Since becoming a party to the convention in 1982, India has designated 75 wetlands as ‘Wetlands of International Importance’ as of 2022. These cover over 1.3 million hectares. Of the 75, a total of 14 are in Tamil Nadu and 10 are in Uttar Pradesh.
The main advantages of the designation of Ramsar sites are that it encourages international cooperation, brings access to expert advice and the latest information, presents an opportunity for a country to make its voice heard at the international and the government level, provides an opportunity for wise use of wetlands and opportunity for getting international guidelines on various wetland conservation themes. The Ministry of Environment has also notified the Wetlands (Conservation & Management) Rules, 2017 which are applicable to all Ramsar sites.
Government of India’s programs for conserving wetlands
The Ministry of Environment has undertaken the ‘Wetlands Rejuvenation’ programme within the framework of 169 transformative ideas of the Government of India – “Start work on Restoration & Rejuvenation of at least 100 major wetlands across the country”.
National Plan for Conservation of Aquatic Eco-systems (NPCA) is a centrally sponsored scheme for the conservation and management of identified wetlands (including lakes). The scheme covers various activities such as interception, diversion and treatment of wastewater, shoreline protection, lakefront development, in-situ cleaning, stormwater management, catchment area treatment, lake beautification, survey & demarcation, bio-fencing, fisheries development, weed control, biodiversity conservation, education and awareness creation, community participation, etc.
Mission Sahbhagita was launched recently which involves participatory conservation and wise use of wetlands to enable a society ownership approach with communities leading at the forefront. The Ministry has also launched the ‘Save Wetlands Campaign’ in 2023.
More comprehensive data is needed
The decadal change in the extent of wetlands may be attributed to anthropogenic activities and natural cycle processes. Some reasons for expansions include conversion of one class of wetland to another, river changing its course, shift in precipitation patterns, and development activities. There is no comprehensive data to conclude that the increase is due to the government’s efforts alone.
The increase in area over the decade is an indicator that the spreading out of the existing wetlands is greater than the shrinkage. Likewise, where shrinkages have occurred, it can be because of more shrinkage than spreading out. For instance, the area of an ecologically important wetland has declined over the years while the area of aquaculture ponds set up by humans has increased. The overall increase in area under wetlands does not necessarily translate to the success of conservation efforts. The ecological services offered by it are lost and not replaced. To get a better understanding of the trends, we will thus need comprehensive data on the type of wetland that has changed- whether natural or man-made, at the state level and zonal level.
Featured Image: Wetland Area

created: October 19, 2023


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Data: Tracking the Trend on Household Savings
Sai Krishna Muthyanolla
October 12, 2023
Household savings are an important measure that indicate multiple different things about the economy. The recently released RBI data shows that India’s household savings are at a five-decadal low, accounting for only 5.1% of the GDP. But what has been the trend overall? Is there a shift in household savings?
In propelling economic growth, savings and investments emerge as powerful engines. Economic history reveals that nations good at amassing substantial domestic investments, predominantly fuelled by savings from within their own borders, witnessed swifter growth of economic prosperity and advancement. The pivotal factor in driving economic growth lies in the generation of increased savings and their effective allocation into productive investments.
Households, in their multifaceted roles as contributors to production, as consumers, and as reservoirs of financial support for investments through their savings, stand as the cornerstone of an economy’s functionality. Thus, the financial well-being of households takes centre stage, assuming a pivotal role in overall financial stability. With this context, we look at the trends in household savings in India.
India’s Household Savings plummet to a 47-Year low, standing at just 5.1% of FY23 GDP.
The recently released RBI data shows that India’s household savings are at a five-decadal low, accounting for only 5.1% of the GDP. Information regarding yearly household savings is made available by the Central Statistics Office (CSO) in their January report known as the ‘First Revised Estimates (FRE) of National Income, Consumption Expenditure, Saving and Capital Formation.’ These figures are later updated in subsequent annual releases.
From a Flow of Funds (FoF) perspective, households have traditionally been considered a sector with a financial surplus. The RBI also publishes data on changes in financial assets and financial liabilities at current prices in its annual ‘Handbook of Statistics on Indian Economy’. The difference between financial assets and liabilities is taken to be financial savings, and it is measured as a percentage of GDP at current prices.
Data compiled from the RBI show that the current savings share of 5.1% is a 47-year low. It is slightly lower than the 5.23% during 1977-78. Between the 1990s to 2010s, the average savings stood at 10.4%, thereafter from 2011 to 2023, the average savings fell to 7.7%.
The composition of household financial savings is changing.
Traditionally, households’ financial assets comprise bank deposits, investments such as mutual funds, and equity, savings in currency form, provident and pension funds, small savings, and life insurance funds. The data from the RBI annual report suggests that the share of deposits out of the gross financial saving fell to 3.5% in 2021-22 from 6.0% in 2011-12, whereas share of provident and pension funds rose from 1.1% to 2.4% during the same period.
The quarterly data starting from 2018-19 to 2022-23 on flow of financial assets and liabilities released by RBI also complement this. The gross financial savings in currency form registered a decline of almost 15%, whereas it rose by 65% and 23% in PPF and investments respectively.
Is there a structural shift in household savings?
As mentioned earlier, the effective channelisation of household savings into productive investments is the hinge on which the growth of economy rests. In other words, investments act as a proxy for household savings. There have been shifts in household savings- both in the composition and the structure of savings. In the composition, there has been a shift towards other forms of investments from traditional bank deposits.
On the structural shift aspect, there is a marked shift from financial assets towards physical assets. The data on gross fixed capital formation (GFCF) by household sector reveals that the GFCF of the household sector grew from Rs. 13.8 Lakh Crores in 2011-12 to Rs. 27.5 Lakh Crores in 2021-22. Among the household sector, dwellings, other buildings, and structures had a larger share, followed by machinery and equipment. The GFCF for construction activities, i.e., dwellings, buildings, and structures grew from Rs. 11.2 Lakh Crore to Rs. 18.5 Lakh Crore during the same period. Particularly, between 2020-21 and 2021-22, it rose by Rs. 4.5 Lakh Crore.
Sharp uptick in the deployment of bank credit for housing and personal loans
One reason apparently stated by the government amidst the debate on falling household savings is that people are moving from financial to physical assets by taking loans to buy real estate properties and vehicles. The data on the deployment of bank credit for the non-food sector indicate that vehicle loans grew from Rs. 0.6 Lakh Crore in 2007 to Rs. 5.0 Lakh Crore in 2023. Similarly, bank credit for other personal loans grew from Rs. 0.8 Lakh Crore to Rs. 11.3 Lakh Crore during the same period. The lending for the housing sector, including the priority sector lending grew from Rs. 2.3 Lakh Crore to Rs. 19.5 Lakh Crore in this period.
Are the concerns around dip in household savings reasonable?
Traditionally, in terms of their contribution to savings generation, the primary contributors are, in descending order, the household sector, corporate sector, and public sector. Conversely, when it comes to investment, the leading contributors are the corporate sector, household sector, and public sector, in that sequence. Now that seems to be changing with the household sector preferring investments rather than savings.
Household financial savings have experienced a decrease in recent years, while physical savings have shown a rising pattern. The prevailing prevalence of physical savings over financial savings in the household sector can be attributed to ongoing economic developments, including a thriving residential property market, the growing availability of housing loans, favourable demographic characteristics of the economy, substantial incomes in sectors such as IT, finance, and BPOs, where young, skilled professionals are earning and saving more.
There is no definite answer for concerns surrounding the dip in household savings. Interpretational issues have remained endemic to the savings and investment estimates, owing to the lack of direct estimation of household savings and its cross validation. As the authors in this article mention, it is inconsistent to ask households to save more and also to spend more simultaneously.

created: October 12, 2023


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Trade data for first six months of 2021-22 shows a rise in Gold Imports
Sai Krishna Muthyanolla
November 13, 2021
The industry bodies recently released a joint statement that record Gold sales were reported from across the country during the recent festival season. The trade data from the commerce ministry supports this statement as Gold imports increased significantly in the first six months of 2021-22.
According to a joint statement released by the Confederation of All India Traders (CAIT) and its jewellery arm, All India Jewellers’ and Goldsmith Federation (AIJGF), the Indian jewellery market has made a major comeback almost two years after the COVID-19 pandemic-induced economic slowdown. In this article, we explore the trend in gold imports over the last few years to see if the increased demand in 2021 is reflected in the imports.
89% Indian Gold demand met by imports.
Gold impacts the Indian economy in varied ways. Gold is used as one of the major raw materials for jewellery and coins. There are four sources of Gold supply – imports, domestic gold availability through local mining, refining, and recycling, and monetisation. Of the total supply, around 1% comes through local mining, about 10% comes from recycling and the rest 89% from imports, according to a NITI Aayog report.
India is the second-largest consumer of gold in the world, accounting for 25% of the global demand for gold, as per the same NITI Aayog report. About 73.1% of the gold demand in India is for jewellery consumption, 15.9% for bullions, 6.9% for coins, and about 1.4% for industrial use.
To understand the trend in gold imports in India, we looked at the Trade Statistics maintained by the Ministry of Commerce and Industry.  Each trade commodity, in its various forms, is allotted a Harmonized System (HS) code, by the Directorate General of Foreign Trade (DGFT). To comprehensively look at the gold imports, we have collated the data for HS codes under five categories – gold bars, coins, jewellery etc.
Gold imports have significantly risen in 2021, after the slowdown in 2020.
The joint statement of the industry body highlights that around 15 tonnes of gold jewellery were sold on the Dhanteras festival. Jewellers around the country saw sales worth Rs. 7,500 crores. This includes an estimated sale of Rs. 1,500 crores in Maharashtra, Rs. 1,000 crores in Delhi, Rs. 600 crores in Uttar Pradesh and Rs. 2,000 crores in South India, besides other states.
The present year i.e., 2021 registered a strong jump in the volume of gold imported, owing to strong economic activity and improved customer demand. The data about the increase in imports corroborates with the industry body estimates of increased demand & sales in the 2021 festival season. The last year i.e., 2020 registered particularly low gold imports, owing to the economic slowdown caused by the COVID-19 pandemic.
Imports grew by 335% in the first half of 2021.
Growth of gold imports registered a bumper growth percentage over last year. The first six months of 2021-22 registered a growth of 335.4% over the first six months of 2020-21, which was characterised by lockdown and a total shutdown of economic activities for several months.
The gold import in the first six months of 2021-22 (first six months) has significantly exceeded the imports of years preceding 2020-21 (first six months).
Gold imports in the first 3 quarters of 2021 are higher than in the preceding years.
Let’s look at the monthly data for the past years.
The quantum of gold imports for the years preceding the COVID-19 pandemic in 2020 show a relatively increasing trend, at least for the first two quarters. In 2020, however, the second quarter took the worst hit due to lockdown and economic closures and registered one of the lowest volumes of gold imports. Towards the last quarter, however, the trend picked up pace as data suggests.
In 2021, the available data for the first three quarters shows a significant increase in the quantum of gold imports in comparison to the last few years. This year, the gold imports are not only back on track but also exceeded the earlier records.
Switzerland accounts for the highest supply of gold to India.
India is dependent on gold imports, either in refined or dore form. India imports dore from approximately 17 countries spread across America, Asia, and Africa.
Switzerland is one of the major countries where India imports its gold from.  According to the NITI Aayog Report on Gold Market Ecosystem in India, in 2016, the top 3 countries from which India sources gold imports are Switzerland, UAE, and South Africa.
Domestic sources, as mentioned before, account for only 1% of the gold supply in India. For instance, in 2016, India mined less than 2 tons of gold from the Hutti gold mines in Karnataka. In the same year, refining of a domestic scrap of gold-stock accounted for about 1% of total household gold stock.
Featured Image: Rise in Gold Imports

created: November 13, 2021


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UDISE+ report highlights the stark differences in Digital Infrastructure between Urban/Rural and Government/Private schools
Sai Krishna Muthyanolla
July 17, 2021
The recently released 2019-20 UDISE+ report highlights the stark differences between the Urban & Rural schools and between Government & Private schools in digital infrastructure. Multiple studies have highlighted that the pandemic induced lockdown has exacerbated the condition of students in such schools.
In continuation to our earlier story on data from UDISE+ reports, we look at the availability of infrastructure services in schools across rural/urban locations, types of management and states.
The UDISE (Unified District Information System for Education) is one of the largest Management Information Systems on school education. It covers more than 15 lakh schools, 85 lakh teachers and 25 crore school children. In our earlier story, we elaborated how UDISE+ data indicates that while physical infrastructure has improved in schools across states over the last few years, the status of digital infrastructure is poor.
UDISE+ data presents the availability of physical and digital infrastructure in schools run by different managements, especially government, government-aided and private unaided. The School Management code for a specific school is assigned based on its management and provision of Government Aid. The schools are categorised as Government (includes State Government, Local Body and Central Government), Government Aided (Privately managed but Government provides aid) and Private Unaided (managed by individual or a group of individuals (trusts, society, or corporation) and not receiving any aid from Government. ‘Others’ category refers to schools that do not fall in the options given i.e., recognised and unrecognized madrasa and unrecognised private schools. Unrecognized refers to Schools that have no recognition from the government.
The majority of schools are run by government, followed by private schools.
According to the UDISE+ data for 2019-20, government-run schools form the majority (68.5%) of total schools for elementary, primary, and secondary education. Private unaided schools form the other significant proportion (22.4%) of total schools. Government-aided schools (5.6%) and other schools (3.5%) form small proportions out of the total schools.
Private Schools outperform Government schools in the availability of functional electricity, playground, internet, and computer facilities.
According to the UDISE+ data for 2019-20, private unaided schools have better facilities than government schools in critical digital infrastructural facilities.
Urban schools outperform rural schools in the availability of functional electricity, playground, internet, and computer facilities.
According to the UDISE+ data for 2019-20, schools in urban areas have better infrastructural facilities as compared to schools in rural areas. Especially in terms of digital infrastructure facilities, the gap between schools in urban and rural areas is significant.
Schools in Northeastern states report the lowest access to functional electricity, followed by Odisha, J&K.
While access to electricity in schools has improved significantly, schools in Northeastern states fall behind in terms of access to functional electricity.
Schools in Northeastern states report the lowest access to WASH facilities, followed by Andhra Pradesh, Karnataka, UP, Bihar.
WASH is an acronym that stands for “water, sanitation and hygiene”. WASH facilities include the availability of clean water (drinking water), toilets/washrooms, and handwash. Schools in Northeastern states fall behind in terms of access to WASH facilities.
Schools in Northeastern states report the lowest access to and digital infrastructure, followed by Bihar, Chhattisgarh, West Bengal.
In our previous story, we elaborated on how the proportion of schools with internet facilities remains low at 22.3% in 2019-20, despite improvements in the previous years.
School closure due to pandemic exacerbated by infrastructure gaps.
There exists a gap between access to physical infrastructure and digital infrastructure by location, state and management type. While government-run schools form the majority (68.5%) of total schools, Private unaided and Government aided schools perform relatively better than government schools in most infrastructural indicators such as functional electricity, playground, internet, and computer facilities. Schools in urban areas outperform schools in rural areas in most infrastructural indicators such as functional electricity, playground, internet, and computer facilities.
A majority of Northeastern states and populous states like Uttar Pradesh, Bihar, Odisha, among others reported relatively low access to physical infrastructure facilities like functional electricity, availability of clean water, washroom and handwash facility. In terms of digital infrastructure coverage in schools, these states perform very poorly, as less than half of the total schools in the states have internet facilities.
When we put these findings in the context of the ongoing pandemic, the inequality in access to infrastructure facilities seems starker. A study by Oxfam India highlights the impact of the pandemic (and prolonged school closure) on access to education, modes of education delivery and access to entitlements in both government and private schools. A total of 1158 parents (across private and government schools) and 488 government school teachers across five states- Bihar, Chhattisgarh, Jharkhand, Odisha and Uttar Pradesh were surveyed for the study. While the report is limited to five states, it offers insights into how education is being delivered during the lockdown, challenges in accessing it and issues being faced by teachers during this time.
In government schools, a third of the students continue to be deprived of Mid-day meals while textbooks have not been received by over 80% of children. Current modes of education delivery have relied heavily on technology, leading to the exclusion of over 80% of students, who have remained disconnected from education since schools were closed. This is borne out by the teachers surveyed as well— 40% of whom believe that a substantial number of children will not return once schools reopen.
The study also highlights the lack of teacher preparedness and the complete lack of capacity building/support by state governments to deliver education digitally in government schools. Additionally, less than 5% of children have received any additional physical learning materials from the government to supplement delivery through digital modes. This can be further emphasised by considering that government-run schools form the majority (68.5%) of total schools in the country for elementary, primary, and secondary.
Consistent with other evidence, the study also finds that private schooling involves massive out-of-pocket expenditure and comprises over 20% of total household expenditure (on average), making it unaffordable for low-income families in the country. The financial burden of expenditure on private schooling has reportedly been made worse due to the ongoing pandemic and economic crisis. Despite the crisis and notifications to restrict fee hikes (in 4 of 5 states surveyed), over 40% of parents reported being charged increased fees, highlighting profiteering and violation of regulations by private schools.
Featured Image: Digital Infrastructure in schools


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Data: Under UDAN Scheme, Alliance Air Received More than 60% VGF While Indigo & Alliance Air Ran More than 50% flights
Sai Krishna Muthyanolla
June 8, 2023
Data from the Ministry of Civil Aviation indicates that more than 2.2 lakh flights plied under the UDAN scheme since inception. Indigo & Alliance Air accounted for more than 50% of the flights under the scheme while 60% of the VGF went to Alliance Air.
To improve air connectivity to underserved areas in the country, the Ministry of Civil Aviation (MoCA) came up with the ‘Ude Desk ka Aam Naagrik’ scheme, which is popularly known by its acronym, UDAN, as a regional airport development and Regional Connectivity Scheme (RCS). Apart from improving connectivity, the objectives of the scheme include making air travel more affordable and operations and connectivity sustainable.
Launched in 2016, after the completion of four rounds, the Ministry recently launched UDAN 5.1 to further enhance the connectivity to remote areas of the country and achieve last-mile connectivity through helicopters, in the fifth round of implementation of the scheme. While the latest round is exclusively designed for helicopter routes, the Ministry claims that under the scheme, passengers have received the benefit of air connectivity, airlines have received concessions for operating regional routes, and unserved regions have received the direct and indirect benefits of air connectivity for their economic development.
In this story, we look at the figures pertaining to the number of flights operating under the scheme and the Viability Gap Fund (VGF) released to various airline operators. The data for this story on UDAN flights across different routes, airline companies operating them, and the VGF released has been taken from Dataful, a product of Factly.
Up to March 2023, 2.24 lakh flights ran under UDAN connecting over 100 cities
According to the data provided by MoCA in response to an application under RTI, a total of 2,24,605 flights were operational across 404 routes or sectors connecting more than 100 cities, under the UDAN scheme as of March 2023. These were operated by 13 airlines. Taking into consideration the total number of flights operating across each sector, the top 10 routes with the greatest number of flights are in the table below.
Top routes under the scheme connected a city in Karnataka or Hyderabad or Kolkata
More than 2,500 flights each flew to and fro between Belagavi (Karnataka) and Hyderabad (Telangana). Between Kolkata (West Bengal) and Jharsuguda (Odisha), more than 2,100 flights each plied to and fro while more than 2,000 flights each plied to and fro between Bengaluru (Karnataka) and Kalaburagi (also in Karnataka). A total of 20,740 UDAN flights flew in the ten routes listed above, which is about 9% of the total UDAN flights. It can also be seen that six out of the ten routes connect at least one city in Karnataka. Six routes connect Hyderabad to another city.
The following chart depicts the total number of passengers that have travelled across each of the routes since the operationalization of the UDAN scheme.
As per the passenger traffic data, in the sectors of Mysuru – Hyderabad, Hyderabad – Mysuru, and Bengaluru – Kalaburagi, the number of passengers has increased consistently over the years since operationalization. Meanwhile, in the sector, Bengaluru – Kalaburagi, a marginal drop in passenger traffic was witnessed in 2022 as compared to 2021. In the sectors Hyderabad – Kolhapur and Kolhapur – Hyderabad, the passenger traffic saw a sudden jump to around 26,000 passengers in 2019 from about 600 passengers in 2018. However, in 2020, both routes witnessed a drop on account of COVID-19 restrictions. Since then, there has been a gradual rise in the number of passengers using both routes, exceeding 2019 levels.
In the remaining four routes, Belagavi – Hyderabad, Hyderabad – Belagavi, Kolkata – Jharsuguda, and Jharsuguda – Kolkata, the number of passengers was on a continuous rise until 2021, which fell considerably by 30% to 40% in 2022. However, compared to the first two years of operationalization, the number of passengers in these sectors is greater despite the drop in 2021.
Going by the traffic data available for each of these routes as of March/April 2023, the number of passengers is estimated to increase in most of these routes even in 2023.
50% of the flights were that of Indigo and Alliance Air
The data on the airline-wise total number of flights under the UDAN scheme reveals that the majority of the flights, about 58,000 of the total 2.24 lakh flights were of IndiGo, which is nearly 26% of the total flights. Alliance Air had the second highest number of flights, accounting for 24% followed by Spicejet with 23.5%. Trujet accounted for 13% while Godhawat Aviation accounted for 6%. Altogether, the five airlines contributed to 93% of the flights. The remaining 8 airlines together had only around 16,000 flights, accounting for 7%.
Alliance Air received over 60% of the VGF released in last five years
A total of Rs. 5,678 crores have been released as a ‘Viability Gap Fund’ or VGF between 2017-18 and 2022-23, under the UDAN scheme. Under the demand-driven scheme, the Aviation Ministry provides monetary assistance to the airline operator to enable them to successfully run the routes. The support is determined by the market, through a competitive bidding mechanism where the airline operators bid for the route in the form of VGF per seat. The VGF per seat is capped. VGF per seat is also indexed to changes in CPI-IW, US-INR exchange rate, and ATF prices. That is, the VGF per seat takes into account the said economic indicators.
Under the scheme, data indicates that Alliance Air has received the highest share of VGF in the last five years. About 60% of the total amount released or Rs. 3502 crores went to Alliance Air which has the second-highest share of flights flying under the scheme. A total of Rs. 638 crores was released for IndiGo and SpiceJet was released for Rs. 513 crores. In the last two years, the VGF released for IndiGo was higher than that for Alliance Air. Less than Rs. 100 crores were released to Pawan Hans, Zexus Air Service (Zoom Air), Heritage Aviation, and Deccan Charters (Deccan Air). It should be noted that Pawan Hans is a Central Public Sector Enterprise
Slow progress in the implementation of the scheme was flagged by a parliamentary standing committee in 2021
Data indicates that more people are travelling by airplanes than ever before, due to increased connectivity and affordability as envisioned in the scheme. However, other factors such as improved income, changes in people’s choices, etc. could have also played a role. Earlier, studies highlighted how the implementation of the scheme varied across regions. It revealed an imbalance between the eastern, northeastern and central regions of India when compared with other regions. Previously, a parliamentary standing committee had flagged the slow progress in the implementation of the RCS-UDAN scheme, observing a shortfall of more than 50% of the target in the operationalization of the scheme.
Featured Image: Air Travel


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Data: Understanding the ‘Death Registration’ numbers of various states
Sai Krishna Muthyanolla
May 13, 2022
The recently released excess COVID-19 mortality estimates by the World Health Organization (WHO) attracted severe criticism from multiple countries, particularly India. To counter the excess mortality estimates by the WHO, the government relied on the recently published Vital Statistics of India based on the Civil Registration System 2020.
The recently released excess COVID-19 mortality estimates by the World Health Organization (WHO) attracted severe criticism from multiple countries, particularly India. The WHO estimated the COVID-19 linked deaths in India to be around 4.7 million, which is by far the highest for any country and makes up for nearly one-third of the global deaths. The official government death toll as of 12 May 2022 stands at 5,24,181, equivalent to approximately 0.5 million. The excess mortality comes around 0 times the official government data.
The Government of India (GoI) refuted the claims made by the WHO on excess covid mortality estimates. India’s primary objections were linked to the validity and reliability of the data models and the data collection methodology.  GoI had also highlighted the inverse relationship between temperature and mortality, as assumed in the data modelling, despite repeated requests to substantiate the same. GoI also questioned the usage of data modelling, when authentic data is available in the form of the Civil Registration System (CRS), through a robust network of entities under the Register General of India (RGI).
To counter the excess mortality estimates by the WHO, the government relied on the recently published Vital Statistics of India based on the Civil Registration System 2020. The government clarified that since this report publishes ‘all-cause mortality’, the mortality associated with COVID-19 can best be inferred to be a sub-set of this ‘all-cause mortality’ for that particular year. There are similar objections made by the government regarding the usage of test positivity rate, demographic, and size considerations in arriving at the estimation of excess COVID-19 deaths.
In this article, we look at a few issues surrounding the data on COVID-19 mortality to bring some clarity to the whole issue.
Indian death statistics
As stated earlier, CRS data represents the ‘all-cause mortality’ in India. The data is sourced from the annual statistical reports prepared by the respective chief registrars of the states and Union Territories. The period for the 2020 report is from 01 January 2020 to 31 December 2020.  The number of registered deaths in India in 2020 stood at 81,15,882, which was 76,41,076 in the year 2019. This represents an increase of 6.2% of the registered deaths in 2020, as compared to 2019.
The majority of the Indian states have shown an increase in the number of registered deaths in 2020 compared to 2019. States like Jharkhand, Kerala, Manipur, Telangana, Uttar Pradesh, Uttarakhand, and Delhi reported a decline in the number of registered deaths in 2020 as compared to 2019. To see if this is an anomaly, the trend from 2011 is plotted for these states. This is not a one-off incident, as these states reported a decline in deaths in past years as well. However, what makes this year’s decline significant is that the world has faced a deadly pandemic. At a time when countries across the globe, including India, reported a rise in deaths, the decline in the share of deaths for these states should be looked with careful consideration. It must also be kept in mind that the figures from the CRS data indicate only the registered cases and not the actual cases. Thus, the level of registration is critical to understanding the gap between registered and actual cases. Incidentally, the percentage of death registrations completed within the prescribed limit of 21 days is low for these states, with Jharkhand at 50.7%, Kerala at 55.3%, Telangana at 65%, Uttar Pradesh at 50%, and Uttarakhand at 44.2%. In fact, nearly 15 States and Union Territories had less than 80% of death registrations done within 21 days.
COVID-19 deaths as a percentage of registered deaths
The government, in its rebuttal, made clear that the COVID-19 deaths at best can be inferred as a subset of the total CRS reported mortality in India for that period. Accordingly, the COVID-19 deaths till the end of 2020 are considered to map with the CRS all-cause mortality in 2020. No state except Uttarakhand and Maharashtra accounted for more than 2.5% of the COVID-19 related deaths of the total registered deaths as per CRS in 2020. States like Uttar Pradesh, Telangana, Kerala, which reported a decline in all-cause mortality in 2020 compared to 2019, had less than 1% of their total registered deaths associated with COVID-19 in 2020.
Exploring the plausible reasons for the decline in deaths in certain states
As observed above, states like UP, Telangana, Kerala, Delhi reported a decline in the registered deaths in 2020. To understand the possible reasons behind such decline, we looked at the accidents and suicides cases in India, data of which is published by the National Crime Records Bureau (NCRB). This analysis is based on two specific assumptions:
Accordingly, the data is mapped for these states. It is found that except for Uttar Pradesh, almost all states followed a normal trajectory in suicides and accident-related deaths in 2020. Even in the case of Uttar Pradesh, this decline is not significant, when compared to its own overall decline in deaths. Hence, these figures also do not justify the decline in death cases for these states.
Life insurance claims as a proxy for COVID-19 deaths
Insurance claims can be considered as a representative metric for looking at the deaths that occurred. A Right to Information (RTI) by the Indian express reveals that the total COVID-19 death insurance claims settled by both the private insurers as well as the Life Insurance Corporation, from the beginning of the pandemic stand at 2.2 lakhs, amounting to Rs. 17, 362.48 crores. However, for the fiscal year 2020-21, the claims settled were only Rs. 1418.71 Crores, with around 21,304 claims.
The significant difference between the total settled amount from the beginning of the pandemic and the settled amount in 2020-21 indicates that a vast number of claim settlements occurred after 2020. This is because the second wave had a more devastating impact than the first wave. Another reason for the spike in the settlements could possibly be the improvement in the percentage of insurance penetration in India, which improved from 2.8% in 2019-20 to 3.2% in 2020-21. The value of claims rejected also rose sharply from Rs. 575 Crores in 2019-20 to Rs. 865 Crores in 2020-21. This could be due to the confusion in the initial days of the pandemic as to whether it is covered under insurance policies. Hence, unless we have detailed registered death figures for 2021 (CRS 2021), it is difficult to understand the reasons for such trends in some states.
Level of registration hidden in CRS 2020 report
As mentioned earlier, the level of registration is critical to understanding the gaps between actual deaths and registered deaths. CRS data has only registered deaths and not actual deaths. Every year, the CRS report gives the level of birth and death registration. Coincidentally, this year’s CRS did not make any mention of the level of registration. Instead, a press release through PIB mentioned the death registration rate for 2020 as 99.9% following the WHO’s excess mortality claims.
Observations on the ongoing debates on excess mortality
In conclusion, it is important to comprehend the fact that the idea behind any model of death estimates is to give a fair warning about future pandemics. Had the data regarding the death reporting system been transparent and accurate (remember the no-death due to lack of oxygen claims), these kinds of models would not have made headlines. It is high time that the death reporting system must be made robust, transparent, and up to date. In this age of dashboards & real-time data, it is not difficult for the government to make these statistics available more real-time than release a report months later.
Featured Image: WHO excess COVID-19 mortality estimates


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Data: Understanding the trends in India’s ‘External Debt’
Sai Krishna Muthyanolla
September 16, 2022
Loans obtained from foreign lenders, such as foreign commercial banks, foreign governments, and international financial institutions, are often referred to as external debt. We look at the trends in India’s external debt, based on status report 2020-21, published by the Department of Economic Affairs.
External debt is defined as “the outstanding sum of those actual current, and not contingent, liabilities that require payment(s) of principal and/or interest by the debtor at some point(s) in the future and that are owed to non-residents by residents of an economy (External Debt Statistics – Guide for Compilers and Users, International Monetary Fund (IMF), 2003). Loans obtained from foreign lenders, such as foreign commercial banks, foreign governments, and international financial institutions, are often referred to as external debt. Countries usually borrow money from foreign lenders to budget their own spending, build infrastructure, finance the recovery from natural disasters and pandemics, and sometimes even to pay off their prior external debt.
The most significant drawback of external debt is that it frequently triggers a debt cycle, which is a cycle of ongoing borrowing, mounting debt, and eventual default. When payments for external debts raise above sustainable levels, it becomes difficult for the governments to incur expenditures for the development of the country. Adding to this, the frequent devaluations of the currency and the ever-changing market conditions make external debts even dangerous. This burden of external debt is not uniform across countries. Developing nations are at a greater risk than developed nations.
Frequent review of the status of external debt is of utmost importance, as it enables the governments to adopt course corrective actions. In today’s story, we look at the trends in India’s external debt, based on the status report 2020-21, published by the Department of Economic Affairs, Ministry of Finance.
India’s External Debt on a rise
India’s external debt by the end of March 2010, stood at 260.9 billion USD. It rose by 21% to 317.9 billion USD by end of March 2011, which again rose substantially every year to reach 474.7 billion USD by end of March 2015. Thereafter, the percentage change in external debt year-on-year stabilized to below 3% till the end of March 2021. In all these years, the external debt corresponding to the previous year declined only once (External debt in 2016-17 stood at 471 billion USD, while in 2015-16, it stood at 484.8 billion USD). The provisional figures for 2021-22 project a steep rise in external debt, increasing by 8% over the previous year.
Vulnerability of external debt
Maintaining external debt at a sustainable level indicates the financial prudence of a nation. Several indicators reflect the vulnerability of external debt. Most important among them are:
External debt to GDP ratio: The external debt to GDP ratio (derived by scaling the total outstanding debt stock (in rupees) at the end of the financial year by the GDP (in rupees at current market prices)) has increased from 18.5 in 2009-10 to 23.9 in 2013-14, thereafter which it declined consistently. From 2016-17 to 2021-22, this value had been stabilized at around 20%.
Foreign currency reserves as a ratio to external debt: The foreign currency reserves, which often act as a buffer to the vulnerabilities of the external sector, as a percentage of external debt, declined from 106.9% in 2009-10 to 68.2% in 2013-14. It again rose consistently from 72% in 2014-15 to 101.2% in 2020-21, except for a fall in 2018-19 to 76%. The provisional value for 2021-22 stood at 97.8%.
Short-term debt as a ratio to total external debt: In this, the external debt is looked at from a maturity standpoint. The maturity structure is an important parameter to analyse the potential debt vulnerability. Short-term debt is often regarded as volatile capital flows. Piling up huge short-term debts exposes the economy to external volatilities and shocks. Short-term debts include
The ratio of short-term debt to total external debt always stood below 25% in India. From 2014-15, it stabilized below 20%.
Debt Service Ratio (DSR): The ratio of total debt service payments (i.e., principal repayment plus interest payment) to the current receipts minus official transfers of the Balance of Payments (BoP) is known as the debt service ratio. It is an indicator to measure the servicing burden of external debt on the BoP. The higher the debt service ratio, the greater the economic threat to the nation.
The trend of DSR in India has not been consistent. It increased and decreased over the years. Such variations in DSR could be due to changes in the quantum of exports, higher debts, greater interest rates, currency devaluation, etc.
Classification of External debt
External debts are classified into five broad themes, which are further divided into several categories. These five themes are – the type of sector, creditor & debtor type, the instrument used, and the type of currency.
Sovereign vs Non-Sovereign Debt
Sovereign external debt (SED) includes defence debt, investments by FPIs, foreign central banks, and other international organisations in treasury bills and government securities, as well as SDR allocations by the IMF. SED was 83.7 billion USD in 2013-14 which grew to 130.8 billion USD in 2021-22, marking a 56% growth. Similarly, non-SED grew from 362.6 billion USD in 2013-14 to 490 billion USD in 2021-22, thereby registering a growth of 35%.
Creditor-wise external debt trend
The old format and the new IMF format are two different ways that statistics about India’s external debt are released. The data is categorised under the following general categories of creditors in the old format: multilateral debt, bilateral debt, IMF-SDR, trade credit, commercial borrowings (CBs), non-resident deposits, rupee debt, and short-term debt. Major creditors among these are Commercial Lenders, NRI Depositors, and short-term trade creditors, accounting for more than three-fourths of the total external debt.
Loans from multilateral institutions are usually long-term and majorly on concessional terms, hence minimizing the risk from external borrowings of the Government. The share of multi-lateral debt as a percentage of total external debt has been declining from 2014-15 to 2020-21. It was 73.6% in 2014-15, which fell to 66.5% in 2019-20. It slightly increased to 67.6% in 2020-21. This is a worrisome trend as the loans acquired from bilateral agencies could invite more short-term risks.
Currency-wise external debt trend
The currency composition of external debt is another important parameter to gauge the potential vulnerability of the external debt. The data for currency-wise external debt trend from 2011-12 till date indicate a dominance of the US Dollar, comprising of over half of the total external debt. It is followed by Indian Rupee, SDR, and Japanese Yen. US Dollar averaged at 58% percent from 2011-12 to 2015-16, which decreased to 52% from 2016-17 to 2021-22. Similarly, Indian Rupee averaged at 24.4% percent from 2011-12 to 2015-16, which increased to 33.7% from 2016-17 to 2021-22. The share of SDR declined from 6.8% to 5.3% during the same period. One of the reasons for such a growth in the Indian Rupee composition could be the rise in FPI investments.
Featured Image:  India’s External Debt

created: September 16, 2022