The information available in public domain is that JICA is financing the Mumbai-Ahmedabad Bullet Train Project by lending 88 thousand crore rupees at an interest rate of 0.1%. Payback period is 50 years with a moratorium of 15 years. The claim is that loan is free and Japan is behaving like a close friend. It is true that no other agency such as World Bank is lending at such low rates of interest. But this is not benevolence. It is part of Japan’s economic policy and it serves Japan’s interests much more than the interests of India. Japan, like other developed economies, is undergoing stagflation. Their capital is in search of new markets. Advancement in technology can be put to a productive use only if it is sold to the countries like India. In this particular sector of high-speed rail, Japan is facing fierce competition after France and China have entered the market. That explains the “favourable” interest rates that they have offered.

The major concern is not about the interest rate but the relative strength of currencies – Japanese Yen and Indian Rupee. As a much higher inflation economy than Japan, Indian Rupee is continuously getting depreciated against the Japanese Yen. One Yen was worth ₹0.35 in September 2007, but 10 years later, in September 2017, every yen is worth 64% more, at ₹0.58. So, any Japanese Yen-loan taken in 2007 has become 1.64 times by 2017, in just 10 years! It is possible that in the 50-year loan repayment period, the ₹88000 crores loan would become 3 times more of the original loan amount. This will put a huge extra burden on the Indian economy. Moreover, the fetish is not likely to stop with MAHSR. More lines will be planned and more loans will be taken. The burden of debt being brought by MAHSR is just the tip of the iceberg. This particular government may not stay but the citizens of India will be tied to the debt forever.