In FY25, the interest expenses of the Centre are estimated to rise 9.3% on year, only marginally lower than the estimated nominal GDP expansion of 10.5%.
The Centre’s debt to GDP ratio rose to 58.2% in 2023-24, as against the budget estimate of 57.2% and the revised estimate of 58.1%, according to provisional data released by the finance ministry. In 2022-23, the ratio stood at 57.9%.
The debt-GDP is estimated to decline to 56.8% in the FY25 budget estimate.
In absolute numbers, the Centre’s debt rose 10.02% to Rs 171.78 trillion from Rs 156.13 trillion, Minister of State for Finance Pankaj Chaudhary told Lok Sabha on Monday. The nominal GDP grew by 9.6% in FY24.
In FY25, the interest expenses of the Centre are estimated to rise 9.3% on year, only marginally lower than the estimated nominal GDP expansion of 10.5%.
The debt data includes the government’s external debt valued at the current exchange rate and Public Account and other liabilities (EBR) of the Central Government.
While debt is estimated to fall in the current financial year as percentage of GDP, it will rise 7.85% to Rs 185.27 trillion. The nominal GDP is estimated to grow 10.5% in FY25.
As per the International Monetary Fund, World Economic Outlook, April 2024, India’s Gross Domestic Product at current prices has already reached USD 3.57 trillion in 2023-24, Chaudhary said.
Moving away from the current fiscal consolidation path driven only by fiscal deficit targeting, the Budget presented on July 23 announced a new regime which will be based on an annual reduction in the debt-GDP ratio from FY27 onwards. This would essentially keep the fiscal deficit below 4.5% of GDP to serve the needs of the fastest-growing economy amid global uncertainties, without committing when it will be brought down to 3%.
As per the FRBM Act 2018, which replaced the FRBM Act 2003, the aim was to bring down the central government debt to 40% of GDP by FY25. In 2017, the NK Singh Committee recommended a ceiling for general government debt of 60%–40% for the Centre and 20% for states. The Centre’s debt to GDP ratio rose to 58.2% in 2023-24, as against the budget estimate of 57.2% and the revised estimate of 58.1%, according to provisional data released by the finance ministry. In 2022-23, the ratio stood at 57.9%.
The debt-GDP is estimated to decline to 56.8% in the FY25 budget estimate.
In absolute numbers, the Centre’s debt rose 10.02% to Rs 171.78 trillion from Rs 156.13 trillion, Minister of State for Finance Pankaj Chaudhary told Lok Sabha on Monday. The nominal GDP grew by 9.6% in FY24.
In FY25, the interest expenses of the Centre are estimated to rise 9.3% on year, only marginally lower than the estimated nominal GDP expansion of 10.5%.
The debt data includes the government’s external debt valued at the current exchange rate and Public Account and other liabilities (EBR) of the Central Government.
While debt is estimated to fall in the current financial year as percentage of GDP, it will rise 7.85% to Rs 185.27 trillion. The nominal GDP is estimated to grow 10.5% in FY25.
As per the International Monetary Fund, World Economic Outlook, April 2024, India’s Gross Domestic Product at current prices has already reached USD 3.57 trillion in 2023-24, Chaudhary said.
Moving away from the current fiscal consolidation path driven only by fiscal deficit targeting, the Budget presented on July 23 announced a new regime which will be based on an annual reduction in the debt-GDP ratio from FY27 onwards. This would essentially keep the fiscal deficit below 4.5% of GDP to serve the needs of the fastest-growing economy amid global uncertainties, without committing when it will be brought down to 3%.
As per the FRBM Act 2018, which replaced the FRBM Act 2003, the aim was to bring down the central government debt to 40% of GDP by FY25. In 2017, the NK Singh Committee recommended a ceiling for general government debt of 60%–40% for the Centre and 20% for states.
Source:financialexpress.com