Looking at steps to bring down public debt: Sitharaman

livemint.com:

New Delhi: The finance ministry is looking at ways to bring down government debt and is monitoring the debt reduction measures taken by emerging market economies, finance minister Nirmala Sitharaman said on Friday. While India’s public debt is not as high as other major economies’, it needs to be tackled with a sense of responsibility so that the future generations don’t feel its burden, she told the Kautilya Economic Conclave. “Data about some emerging market countries, about how they are managing their debt, is something which is actively in our minds in the ministry," Sitharaman said.

“We are looking at ways in which we can bring down the overall debt," she said, adding that the government’s debt reduction efforts have been streamlined. “I am sure we will be able to bring this down." The central government’s debt stood at ₹155.6 trillion, or 57.1% of gross domestic product (GDP), at the end of March 2023. During the same period, the debt of state governments stood at about 28% of GDP.

High debt and the high cost of debt servicing have been challenging for India in its bid to improve its credit ratings. However, the government expects to meet its fiscal deficit target of 5.9% of GDP during the ongoing fiscal year. It aims to reduce the fiscal deficit to 4.5% by FY26 on the back of fiscal consolidation efforts.

Meanwhile, Sitharaman also said the effectiveness of multilateral institutions is declining, not just developmental banks but also institutions like the United Nations, World Trade Organization, and World Health Organization. “The level of effectiveness that they were to bring in is a less-than-ideal position," she said. Sitharaman said that while wars and conflicts are disrupting key supply chains, global