Govt Debt Stands At 57.1% Of GDP As Of March 2023: Centre Informs Parliament

Govt Debt Stands At 57.1% Of GDP As Of March 2023: Centre Informs Parliament

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The central government’s debt stood at Rs 155.6 lakh crore, equivalent to 57.1 per cent of the GDP as of March 2023, the government informed Parliament on Tuesday. Additionally, it also said revealed that the debt of state governments is estimated to be around 28 per cent of the GDP by the end of the fiscal year 2022-23 (FY23).

“The Central Government’s debt was Rs 155.6 lakh crore as on March 31, 2023. It has reduced from 61.5 per cent of GDP in 2020-21 to 57.1 per cent of GDP in FY 2022-23,” Minister of State for Finance Pankaj Chaudhary said in a written reply to the Rajya Sabha, as per PTI. 

In a separate reply, Chaudhary said, “The Central Government has planned to raise net debt resources of Rs 17.99 lakh crore from various sources in FY 2023-24 mainly to finance its fiscal deficit. This amount is about 40 per cent of the total net size of the Union Budget 2023-24 of Rs 45.03 lakh crore.”

The Minister of State for Finance on Tuesday said the Gross Fixed Capital Formation (GFCF) in the Indian economy has increased from Rs. 45.41 lakh crore (constant 2011-12 prices) in 2018-19 to Rs 54.35 lakh crore in 2022-23 (Provisional Estimates), replying to another question. 

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“The government is implementing the ‘Scheme for Special Assistance to States for Capital Expenditure’ (2020-21 & 2021-22) and ‘Scheme for Special Assistance to States for Capital Investment’ (2022-23 & 2023-24),” Chaudhary said. Adding that the government approved a 50-year interest-free loan for capital expenditure in sectors like health, education, irrigation, and power. In 2023-24, Rs 84,883.90 crore was sanctioned, with Rs 29,517.66 crore disbursed so far in Special Assistance to States for Capital Expenditure/Investment to various states, he said.

He also said the government’s roadmap for making India a $5 trillion economy comprises focusing on growth at the macro level and complementing it with all-inclusive welfare at the micro level, promoting digital economy and fintech, technology-enabled development, energy transition and climate action and relying on a virtuous cycle of investment and growth.

The government’s road map was put into effect in 2014, he said, adding major reforms — including Goods and Services Tax (GST), Insolvency and Bankruptcy Code (IBC), a significant reduction in the corporate tax rate, the Make in India and Start-up India strategies and Production Linked Incentive Schemes, among others — have been implemented.

“Central Government’s capital expenditure has increased from 2.15 per cent of GDP in 2020-21 to 2.7 per cent of GDP in 2022-23,” Chaudhary said. 

The minister further stated that the Union Budget 2023-24 has taken further steps to sustain the high growth of India’s economy. These include a substantial increase in capital investment outlay for the third year in a row by 33 per cent to Rs10 lakh crore (3.3 per cent of GDP).

Direct capital investment by the Centre is also complemented by Grants-in-Aid to States for the creation of capital assets. The ‘Effective Capital Expenditure’ of the Centre was accordingly budgeted at 13.7 lakh crore (4.5 per cent of GDP) for 2023-24. This strong push given by the government is also expected to crowd in private investment and propel economic growth, Chaudhary said.

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