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India spends nearly half the tax it collects to pay off debt

India tax collection
Published Last updated This article is more than 2 years old.

For every Rs100 the Indian government receives as tax, it spends Rs45.5 to service its existing debt. This high level eats into the money available to fund the government’s running expenses and projects. And so it ends up borrowing, and a high level of borrowing by the government is one of the reasons for persistently high inflation. The situation can be improved either by increasing tax collections or by curbing expenses.

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