Current Affairs - Economy - Discussion

The Government of India’s debt-to-GDP ratio stood at 58.2% in FY26, according to data presented in Parliament. This was 210 basis points higher than the government’s target of 56.1% for the year. The Union government’s outstanding liabilities had declined from 61.5% of GDP in FY21 to 58.2% in FY26. For FY27, the government has set a lower debt-to-GDP target of 55.6%, requiring a reduction of around 260 basis points. The ratio is an important indicator of fiscal sustainability, as a lower debt burden provides greater flexibility for government borrowing during economic downturns or emergencies.