india gdp, asian development bank, adb projects india gdp for fy2018, indian economy
An employee works inside a research and development wing of Gas Lab Asia in New Delhi, India, March 8, 2017. Picture taken March 8, 2017.Reuters file

As the country throws around various numbers while debating development, economy and demonetisation, latest data mined by Thomson Reuters mined data shows India's corporate debt rose to a seven-year high at the end of March, and the economy is suffering as a result.

The report further shows that a fifth of large India corporates did not earn enough to pay interest on their loans, and the rate of disbursal of new loans fell to the lowest in more than six decades.

The Union government on August 31 released the latest Gross Domestic Product (GDP), which showed growth in the quarter ended June dropping to 5.7 percent — the slowest since the January-March quarter of 2014. The Indian economy had expanded 7.9 percent in the same quarter last year.

The slowdown was led by the manufacturing sector, which expanded at 1.2 percent from 10.7 percent a year earlier. The financial, insurance, real estate and professional services sectors also slowed to 6.4 percent growth in the June quarter, from 9.4 percent a year ago.

The services activty was hit in August as well, even as banks continued to struggle with non-performing asstes NPAs. 

The Reuters report said that banks' struggles with NPAs — most of which is corporate debt — could be alleviated if the Central government recapitalised them. However, the government has yet to inject more funds into the banks, although it has said it will support them. 

Another way to deal with corporate debt would be to empower the RBI to help companies deal with bankruptcy proceedings, but setting up the framework and infrastructure for it requires a time frame that may make it non-feasible. 

Meanwhile, the slowdown in the economy has delivered a blow to Prime Minister Narendra Modi, who is facing criticism for disrupting business activity through his shock cash squeeze last year under the rationale of eliminating black money from the economy, said a Reuters report.

The Central government banned high-value currency notes on November 8 last year. Data released by Reserve Bank of India (RBI) in its annual report on August 30 revealed that 98.96 percent or Rs 15.28 lakh crore out of the Rs 15.44 lakh crore invalid currency notes had come back into the banking system by the end of June 2017.