Finance Minister Sitharaman’s big statement, ‘Centre has set clear targets for transparency in fiscal management’
States have also been asked to implement these.
IEC 2025: Union Finance Minister Nirmala Sitharaman said at the India Economic Conclave (IEC) 2025 in New Delhi on Wednesday that the central government has set clear targets to ensure transparency in fiscal management and reduce its debt levels. He also called upon the states to implement these goals.
Sitharaman said at the Times Network India Economic Conclave that from the next financial year 2026-27, special attention will be paid to fiscal deficit as well as debt levels. He encouraged states to reduce their debt levels so that India can achieve its goal of becoming a developed country by 2047.
He said, “The central government has set clear goals to ensure transparency in the budget process, so that fiscal management is completely transparent and a high level of accountability is maintained. As a result of this, we have been successful in reducing the debt-to-GDP ratio after the Covid-19 pandemic. At that time it had crossed 60 percent, but now it is gradually decreasing.”
India’s debt-to-GDP ratio increased to 61.4 percent after the pandemic, but due to the policies of the central government, it could be reduced to 57.1 percent by 2023-24. The government expects it to further reduce to 56.1 percent this year.
Sitharaman asked the states to give priority to accountability and transparency in fiscal management, as the central government is reducing the level of debt every year.
“Unless the debt-to-GSDP ratio is better managed and kept within the FRMB limit, and the high-interest debt accumulated over the years (which many states are unable to service) is reduced, you will keep borrowing to service the debt. “Wait, don’t borrow for development expenditure. This is a wrong strategy from a fiscal perspective,” the Finance Minister said.
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