Debt grows slower than GDP, CAG says; revenue lapses persist

New Delhi: The central government's ability to service debt has remained positive and the pace of accumulation of its loans between FY23 and FY25 was less than the nominal gross domestic product expansion, according to a CAG report. This indicates that "the economy has grown to be able to absorb and service the accumulated debt", it said in a report.

It also flagged irregularities worth ₹603 crore in the government's export incentive scheme, exposing gaps in revenue recovery and automated controls. The audit found ₹472.69 crore of inadmissible and irregular benefits under the Rebate of State and Central Taxes and Levies scheme. Another ₹130.39 crore arose from systemic failures in issuing scheme scrips.

Also Read: India's debt-to-GDP ratio moderates to 58.2% in FY26: RS


The CAG also highlighted systematic lapses in the government's flagship tax dispute scheme Vivaad se Vishwas, pointing to incorrect tax calculations, revenue loss and prolonged delays in settling cases. The tax department failed to withdraw interest paid to taxpayers under Section 244A in 55 cases involving ₹1,168.27 crore, resulting in revenue loss, stated the report submitted to Parliament.