In a written reply, minister of state for finance Pankaj Chaudhary said the Centre’s internal debt ratio has been moderating since hitting 58.3% of GDP in the Covid year of FY21. It’s estimated to touch 55.4% of GDP, or Rs 164.44 lakh crore, in FY24.
In absolute terms, the external debt will touch Rs 7.93 lakh crore in FY24, according to the revised estimate.
“The increase in the Central government debt as a percentage of GDP in FY21 was mainly on account of Covid-19 global pandemic. However, with the firm commitment of the government to the policy of fiscal consolidation, the Central government’s debt has substantially reduced in the post Covid-19 period,” the minister said.
Rating agencies have flagged elevated debt levels of India while maintaining their sovereign rating for the country at the lowest investment grade level despite strong growth since FY22.
Fitch Ratings, for instance, said last month that India’s debt ratio (both Centre and states) would decline slightly to just above 80% by FY28, even with strong 10.5% nominal GDP growth, as consolidation is set to be gradual.
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