Parliament panel suggests govt explores 'innovative strategies' to cut debt
This story was originally published at 13:59 IST on 18 March 2026
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NEW DELHI – The Parliamentary Standing Committee on Finance has recommended that the finance ministry should "explore innovative debt-reduction strategies" to lower interest burden in the medium term. The panel suggested the ministry works closely with the Reserve Bank of India to optimise its borrowing calendar and shift towards longer-maturity profiles.
The government, which has estimated its gross borrowing for 2026–27 (Apr-Mar) at INR 17.20 trillion, will release its borrowing calendar for the first half of the financial year by the end of March. Meanwhile, the repayments for the year are projected to jump 40% to INR 5.47 trillion.
The committee also recommended the government to set up a "sinking fund" to manage the redemption of long-term bonds systematically. "The committee further recommended that the Department (of Economic Affairs) maintain high levels of transparency regarding "off-Budget" liabilities to ensure the market has an accurate view of the total repayment obligations, thereby maintaining the stability of the sovereign credit rating", the committee's report, tabled in Parliament Tuesday, said.
The panel also told the Centre to maintain a stringent vigil over off-budget borrowings by state governments. This will "ensure regional fiscal discipline and uphold national debt sustainability, ensuring that all financial transfers translate into tangible ground-level outcomes," the panel said.
"The committee concern about the risks of fiscal populism at the state level, where the expansion of non-merit subsidies and off-budget borrowings has historically been used to circumvent debt limits," the report said. End
Reported by Krity Ambey
Edited by Deepshikha Bhardwaj
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