Finance Minister Nirmala Sitharaman said on Sunday that India is moving towards the target of cutting debt, moving on the path of fiscal strength. He did not pay attention to that agencies like Moody’s have not increased India’s credibility despite all this. Sitharaman has a better balance between fiscal growth in FY 2025-26 with fiscal understanding. He has not only given relief to the middle class, but also introduced a blueprint to reduce the fiscal deficit and reduce debt in the percentage form of GDP by 2031 next year. He said that India had to take more loans during the epidemic to meet global challenges, problems at the level of supply system and conflicts in the world to meet the financial needs of the economy.
Sitharaman said, “Despite all this we have shown commitment and we are following our words regarding fiscal deficit. There is not a single year when we have failed to fulfill our commitment. ”Moody’s ratings on Saturday despite the government’s efforts to manage their finance in a judicious manner on Saturday, refusal to increase India’s credibility immediately. Did Moody’s currently retained India’s rating on BAA3 with a stable scenario. This is a low level rating in terms of investment.
India is moving towards fiscal discipline and inflation control, but Moody’s says that a sufficient reduction in debt burden and more important revenue generating measures are necessary to increase credit. Despite the recent reforms, the fiscal deficit and the debt-GDP ratio remains compared to the level of the epidered. The cost of payment of interest on debt remains the largest part in the budget.
Sitharaman said in his eighth budget presented in Parliament on Saturday that the fiscal deficit for the current year will be 4.8 percent of the GDP for the current year, it will be reduced to 4.4 percent by FY 2025-26. He said, “We have said that at the long-term level we will manage our debt in such a way that the loan-GDP ratio is continuously reduced.” We are moving forward in the same way as mentioned in the report of an expert committee. The debt will be brought down.
The Finance Minister said that under the leadership of Prime Minister Narendra Modi, the government has taken such steps, which have not been taken even by many developed economies. He said, “I am not comparing my size with any developed country. But as theory, the work is being worked on to keep debt cut in proportion to GDP, maintaining the fiscal deficit to the target. And all this is being done without any negative effects on social welfare schemes, education or health. ”
Sitharaman said that whatever is necessary to speed up the increase without compromising on public expenditure, while maintaining the path of fiscal strength, steps are being taken. He said, “There has not been a decrease in capital expenditure. We follow two principles. This is… Keeping the fiscal deficit under control and taking loans for only meaningful capital expenditure. ”
When asked about the slight increase in capital expenditure in the next financial year, Sitharaman said that the quality of expenditure also needed to be seen. The revised capital expenditure estimate in the current financial year is Rs 10.18 lakh crore. He said that in fact we have become a habit of growing 16 percent, 17 percent in capital expenditure every year since 2020 and now it is being said that you have not increased it in that ratio in the budget of 2025-26. I would also like to tell you that please see the quality of spending in particular capital expenditure items.
Sitharaman also appreciated the states who have received interest-free amount for 50 years under capital expenditure from the central government. The Finance Minister said, “He has also shown great interest in the quality of capital expenditure and expenditure, so it has been very good….” In FY 2024-25, capital expenditure was less than Rs 11.11 lakh crore. The reason for this was the general election in the country. This affected capital expenditure for four months. He said, “Capital expenditure was slightly slow due to elections in this financial year. Otherwise my revised estimate would also be close to the budget estimate. ”