At the conclusion of the June 2024 quarter, the Center owed a total of Rs 176 lakh crore, a 25% rise from Rs 141 lakh crore the previous year, as confirmed by reports.
The debt increased by 1.2% on a quarter-to-quarter basis, a much smaller increase than the 4.6% growth during the same period last year.
Central Government’s Debt Rises By 25%
The amount of external debt was Rs 9.78 lakh crore, compared to Rs 8.50 lakh crore during the same time previous year.
Additionally, 104.5 lakh crore of the Rs 149 lakh crore in internal loans came from market loans obtained through the issuance of government bonds.
T-bills raised Rs 10.5 lakh crore, gold bonds raised Rs 78,500 crore, and securities against modest savings raised Rs 27 lakh crore were among the additional internal loans.
The government intends to borrow Rs 14.1 lakh crore in FY25.
A borrowing plan of Rs 6.61 lakh crore was announced by the government for the second half of the current financial year.
Government May Reduce Borrowing This Year
Due to lower-than-expected spending, analysts estimate that the government may reduce borrowing this year.
As per Nomura, if the government underspends, fewer Indian Government Bonds (IGB) will be issued.
IDFC First Bank’s Gaura Sen Gupta thinks that the approaching general election may contribute to the fiscal deficit falling short of the 4.9% FY25 target.
Because of the increased demand from index inclusion, the government has kept the supply of G-Sec constant.
The Center pays interest on outstanding debt with 19% of its total revenue collected.
Interest payments have been allocated by the government to Rs 11.6 lakh crore for FY25.
The Center’s debt-to-GDP ratio decreased from 57.5% in FY24 to 54% at the end of June 2024.
Since FY21, when it peaked at 62.75%, the debt-to-GDP ratio has been declining.
