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Govt to focus on ensuring downward trajectory ratio of debt to GDP: Pankaj Chaudhary
Jul-30-2025

Minister of State for Finance Pankaj Chaudhary has said that to reduce the interest-to-revenue ratio, the government's strategy is to focus on ensuring a downward trajectory ratio of debt to GDP. He said as announced in the Budget Speech for the FY 2024-25 (Regular), debt to GDP ratio has been chosen as the fiscal anchor from FY 2026-27 onwards.

As per Budget 2025-26, the minister said, the government aims to keep the fiscal deficit in each year in such a manner that the Central Government debt is on a declining path to attain debt-to-GDP level of about 50±1 per cent by March 31, 2031. Fiscal deficit is a consolidated measure which is arrived at after subtracting non-debt receipts from total expenditure. 

He further said interest payments are 25.2 per cent of total expenditure and 37.3 per cent of revenue receipts as per the Union Budget 2025-26. The fiscal space has been calibrated to increase the trend of capital expenditure from Rs 4.26 lakh crore in FY 2020-21 to Rs 11.21 lakh crore in BE 2025-26. Further, he said, one of the measures of welfare expenditure, Centrally Sponsored Schemes (CSS), has increased from Rs 3.84 lakh crore in FY 2020-21 to Rs 5.42 lakh crore BE 2025-26. 


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