Have you ever borrowed money from your friend ? What happens if you don't pay back ?
If you repeatedly borrow from your friend, what would be your friend's reaction ?
Yes, even governments take loans and have high levels of debt as of 2026. As per the Fiscal Health Index, India has an overall debt of 3.5 trillion. On the one hand, we feel proud of our economic growth and, on the other hand, we need to check our national debt as well.
Reasons why governments have debts ?
*The governments borrow in various situations like investment in infrastructure and development.
* Emergency and crisis management like COVID-19, war, natural disasters. It gives revenue to solve issues quickly and balance the overall economy of our country.
* To repay past debts of previous governments.
From where the government takes loans?
The government takes loans from external and internal procedures. Like domestic liabilities, government bonds, treasury bills from internal and when it comes to external, we take it from Asian development bank, World Bank and other countries.
States which have high debts in India.
*Tamil Nadu
*Punjab
* Uttar Pradesh
* West Bengal
*Kerala
* Andhra Pradesh
Reasons for high debts in these states are major problems with freebie schemes and subsidies. Which are given without calculations. The states are spending above their limit, which would further harm future generations. The revenue earned and revenue spent do not match. Some states are aspirational too, to build better facilities and large scale development, thinking about the long term. Borrowing money is not a bad thing, but when you cross the limit of borrowing, the debt trap begins and leads to an economic crisis.
