India is on track to bring its government debt down to 50% of GDP by 2030, Finance Minister Nirmala Sitharaman said on Saturday, while stressing that fiscal consolidation will continue without compromising spending on social welfare.
Addressing the Indian diaspora in Chicago, the Finance Minister said the government had set itself a target of reducing borrowing to 50% of GDP by 2030.
“We have set ourselves a certain target, which is to bring the borrowing down to the 50% level of GDP by 2030. Therefore, I will be working on that path,” Sitharaman said.
She said the government had also met the fiscal deficit consolidation path it had set for itself, with the final milestone for 2025-26 achieved.
Sitharaman said India’s improving credit ratings reflected the government’s fiscal prudence and economic management. She, however, said the improvement had not come at the cost of social welfare spending.
“Our credit ratings are improving. But that's not by cutting corners. That's not by stopping the resources which have to go for social welfare. It is through proper management of the economy,” she said.
The Finance Minister said India’s next major goal was to become a developed economy by 2047 under the Viksit Bharat vision. With less than two decades left, she said the country would need greater support from people with talent, global exposure and capital.
“Therefore, the speed and scale with which the reforms are happening require a lot more support,” she said, calling for greater participation from the Indian diaspora in providing ideas, expertise and capital.
Sitharaman also highlighted how the government managed global supply disruptions, including shortages of crude oil, LPG and fertilisers.
She said India avoided a major fertiliser shortage by continuously keeping global markets informed about its requirements even as global supplies declined.
The situation was made more difficult by rising risks in international shipping. Ships carrying essential supplies faced difficulties in obtaining adequate insurance cover, while risk premiums increased significantly.
The government responded by creating a fund announced in the Budget to support additional insurance premiums paid by shipping companies because of the higher risks, she said.
“As a result, Indian farmers, Indian households and Indian logistics did not suffer,” Sitharaman said.
She said the government’s ability to monitor global developments while assessing India’s domestic requirements had helped the country remain resilient despite the challenging external environment.
“Many countries have seen their calculations go haywire amid these uncertainties. Thankfully, despite our limitations, we have kept our citizens protected in this challenging environment,” she said.