The government has outlined a roadmap to reduce its debt-to-GDP ratio to around 50 per cent by 2031, Minister of State for Finance, Pankaj Chaudhary, informed the Lok Sabha on Monday, asserting that the government would endeavor to keep the fiscal deficit in check to ensure the central government’s debt remains on a declining path.
Responding to a question, Chaudhary said: “The Union Budget 2025-26 has set a fiscal deficit target of 4.4 per cent of GDP for the current fiscal year. The government aims to maintain this trajectory to achieve a debt-to-GDP level of about 50±1 per cent by March 31, 2031, the last year of the 16th Finance Commission cycle.
According to the latest available Provisional Estimates of Gross Domestic Product (GDP), India’s GDP at constant prices is estimated to have grown by 6.5 per cent in 2024-25. This growth was primarily driven by robust performance in sectors such as: Construction at 9.4 per cent growth, Public Administration, Defence & Other Services at 8.9 per cent growth, and Financial, Real Estate & Professional Services at 7.2 per cent growth. The Economic Survey 2024-25 has projected GDP growth for the year 2025–26 in the range of 6.3 per cent to 6.8 per cent.
The government, he said, has undertaken several initiatives to attract greater domestic and foreign investment, including, focus on infrastructure development and financial sector reforms, measures to reduce compliance burdens and implement digital solutions, wide-ranging reforms across sectors such as Defence, Civil Aviation, Pharmaceuticals, and Space, and most sectors open to 100 per cent FDI under the automatic route, requiring no prior government approval.
These initiatives, he said, aim to maintain India’s appeal as an investment destination and promote economic growth.