Indian Citizens Save - Indian Government Borrows

Back in 2004, Martin Feldstein said in Budget Deficits and National Depth [PDF]:

... the budget deficit of the central government is about six percent of GDP and this rises to about 10 percent of GDP if the deficits of subnational governments are included. The combined government debt is now close to 75 percent of GDP.

More recently on Reuters (emphasis, mine):

By March 2010 its debt liabilities would have climbed to 35 trillion rupees, a 12 per cent jump in a single year.

D. H. Pai Panandiker says in article Indian government - the compulsive borrower.

Percentages does not give me good grasp of actual amount, and I tried searching for the order of debt. Searching around, I did find one page hosted by Finance Ministry of India titled India's External Debt position that seems to have updated atleast recently. It had put the External depth at the figure of 229,887 million US dolloars. At the current exchange rate ( 1 USD = 48.66 INR ), the External depth comes to 11,186,301 million rupees. That amount, I beileve is roughly 11 trillion rupees.

But this covers only the External Depth - what Indian Government owe to other countries. I wanted to find out what Indian Government owes as a whole - to others as well as its own citizens. Finding this was easier, Central Government Debt for the Quarter Ending 31.03.2009-(Q1).

It puts the total debt (both internal and external) at 2840888.68 crore INR. Speaking in millions, that comes to 28.408868 trillian dollars. I think Mr.Panandiker does have his maths in line, when he says it will be 35 trillion rupees in 2010.

Now, we have seen the data that an average Indian household save more than those of other countries. It is quite suprisingly contrasting that the elected government of India has put the whole country in such a financial fix. I am still having hard time grasping the number of zeroes in a trillion.

I know people and companies can go bankrupt. What happens when a country goes bankrupt?