Archive · 19 Aug 2025
India's Debt on Declining Path Post-Covid: FM
The Indian government has been working to reduce its debt after the economic challenges of the pandemic.
The Finance Minister stated that the debt is decreasing, going from over 60% of the country's total economic output to around 56%.
The government plans to keep reducing debt and aims to reach about 50% by 2031.
Additionally, the government's budget deficit is also shrinking.
The Indian economy is growing strongly, with a growth rate of 6.5% last year.
Government reduced debt burden over last five years.
Debt decreased from 61.4% of GDP in 2020-21 to 56.1% in 2025-26.
Fiscal deficit declined from 9.2% to 4.8% of GDP between 2020-21 and 2024-25.
Government aims for debt-to-GDP of ~50% by March 31, 2031.
India's real GDP growth reached 6.5% in 2024-25.
- Who
- Finance Minister Nirmala Sitharaman and the Indian government.
- What
- The government has reduced its debt burden over the last five years and aims to further reduce it.
- When
- Over the last five years, with targets set through 2031.
- Where
- In Parliament.
- Why
- To align fiscal deficit targets and reduce the debt burden.
- Debt-to-GDP (2020-21)
- 61.4%
- Debt-to-GDP (2025-26)
- 56.1%
- Fiscal Deficit (2020-21)
- 9.2% of GDP
- Fiscal Deficit (2024-25)
- 4.8% of GDP
- GDP Growth (2024-25)
- 6.5%
- Target Debt-to-GDP
- ~50% by March 31, 2031
Sources
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