Union Finance Minister Nirmala Sitharaman
Credit: DH Photo
New Delhi: Finance Minister Nirmala Sitharaman on Wednesday said the Centre has set clear goals for transparency in fiscal management and brought down its debt levels, and called upon states to implement the same.
Speaking at the Times Network India Economic Conclave, Sitharaman said from next financial year debt levels will be the core focus area, along with fiscal deficit, and nudged states to lower their debt levels so that the country can achieve its goal of becoming a developed nation by 2047.
"The central government has set clear goals for transparency in budget-making, ensuring that fiscal management is visible to all and meets the highest standards of accountability. As a result, we have been able to bring down the debt-to-GDP ratio since the post-COVID period, when it had crossed 60 per cent. It is now on a declining path," she said.
India's debt-to-GDP shot up to 61.4 per cent post Covid, but policies adopted by the central government helped bring it down to 57.1 per cent by 2023-24. The government expects it to reduce to 56.1 per cent this year.
Sitharaman also called upon states to take up accountability and transparency in fiscal management as a priority just like the central government, which has every year reduced the debt levels.
"Unless the debt-to-GSDP is managed better and kept within the FRBM limits and the stock of debt which is being accumulating over the years with high rate of interest which many states are unable to service, unless even those are brought down, you will be borrowing to service the loans, you will not be borrowing for developmental expenditure. That's a poor play in the fiscal terrain," Sitharaman said.