Debt-to-GDP ratio falls but interest payments increase: CAG report

The central government's debt-to-gross domestic product (GDP) ratio eased between 2021-22 and 2023-24 but its interest payments increased during this period, according to the latest CAG report.

The Centre's interest outgo, as percentage of its revenue receipts, increased to 35.72% in 2023-24 from 35.35% in 2022-23 and 33.99% in 2021-22, according to the CAG report on compliance of the Fiscal Responsibility and Budget Management Act for 2023-24 presented in Parliament on Monday. The interest payment-to-revenue receipt ratio, an important indicator of the government's fiscal health, had hit a record 38.66% in 2020-21, when resource mop-up was hit by the Covid-19 pandemic.

However, the Centre's debt, as a percentage of GDP, moderated steadily from the pandemic peak of 61.38% in 2020-21 to 57% as of March 2024. The pace of accumulation of central government debt between 2020-21 and 2023-24 was lower than the GDP expansion, the CAG said in the report.


"Debt sustainability, as measured by the debt stabilization indicator, was positive in FY24 which is a positive indicator towards stability," it added.