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Informist, Tuesday, Feb. 11, 2025

 

 

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--Sitharaman: Liabilities of Centre mostly domestic in nature    
--Sitharaman: LPG coverage has reached near saturation in India 
--Sitharaman: Under Ujjwala plan, per capita consumption 4.4 cylinders/year 
--Sitharaman: Give highest priority to inflation management
--Sitharaman: Both Centre, states will have to look at debt consolidation 
--CONTEXT: Sitharaman responding to FY26 Budget discussion in Lok Sabha 
--Sitharaman: Money not being denied to any capex accounts 
 

 

NEW DELHI – While the Union Budget for 2025-26 (Apr-Mar) has set a glide path for the Centre to bring down its debt-to-GDP ratio, the state governments also need to focus on lowering their debt burden, Finance Minister Nirmala Sitharaman said on Tuesday. The Centre is set to cut its debt-to-GDP ratio to 50.0% in a band of 49-51% by FY31 from 57.1% in FY25.

 

"Not only the Centre, but also states will have to look into debt consolidation and also rationalising their debt balances," Sitharaman said in Lok Sabha. "We have outlined a debt consolidation pathway for the Union government till March 2031, and this would give some kind of guidance to the markets with greater predictability."

 

The Indian federal government's debt-to-GDP ratio, which also includes debt burden of the state governments, was 83% in 2023, according to the International Monetary Fund.

 

"Liabilities of the central government are mostly domestic in nature, with a small portion of 3.4% of total liabilities at book value are external liabilities," Sitharaman said. "If a big number is attributed to external debt then there will be concern but our external debt is not big."

 

With a capital expenditure target of INR 11.21 trillion for FY26 and estimate of INR 10.18 trillion for the current year, the government is not denying funding into any capital accounts, according to Sitharaman. "We have also partnered with states to deepen the multiplier effect on capital spending by providing them with 50-year interest free loans," Sitharaman said, adding that the allocation for the loans have risen to INR 1.50 trillion for next year from INR 120 billion in FY21, when the Centre started the scheme.

 

"States are speedily coming up with a lot of proposals, which is very, very good, and we are able to give them that kind of money to support their proposals," Sitharaman said.

 

Speaking on inflation, Sitharaman said price management is of highest priority to the government. She said Pradhan Mantri Ujjwala Yojana has helped bring down prices of liquefied petroleum gas cylinders for the economically weaker section of the society. With 329 million households getting LPG connections, the domestic LPG coverage has reached "near saturation", she said.

 

The 329 million households include 103.3 million households that received LPG connection under the Pradhan Mantri Ujjwala Yojana, the minister said. "Under PM-Ujjwala, the refill rate, that is the per capita consumption is 4.4 cylinders a year." The government provides a subsidy of 300 rupees per 14.2 kg cylinder to eligible beneficiaries for up to 12 refills in a year under the scheme.  End

 

Reported by Krity Ambey

Edited by Ashish Shirke

 

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