New Delhi, Dec 17: Finance Minister Nirmala Sitharaman on Wednesday said that lowering India’s debt-to-GDP ratio will be a “core focus” of the government in the next financial year 2026–27, as part of its broader commitment to fiscal discipline and long-term economic stability.
Speaking at a media interaction in the national capital, Sitharaman said the country’s debt-to-GDP ratio had crossed 60 per cent during the Covid-19 period but has since been on a declining trajectory. “It is already coming down, but we need to reduce it further. This will be a core focus in the next financial year,” she said, citing RBI studies that flag worrying debt levels in some states.
The Finance Minister warned that unless states manage their finances within the Fiscal Responsibility and Budget Management (FRBM) framework and curb high-interest borrowing, loans may be used merely to service existing debt rather than for development. Such practices, she cautioned, could threaten India’s long-term growth vision of becoming a ‘Viksit Bharat’ by 2047.
Highlighting the Centre’s commitment to transparency and accountability, Sitharaman said fiscal management standards have been strengthened under the current government. She added that the government is also working to deepen the bond market to enable greater capital flows into the economy.
Sitharaman credited the Union government’s fiscal discipline and stability under Prime Minister Narendra Modi’s third term for enhancing India’s global negotiating position. She said expanded financial inclusion, Mudra loans, and universal bank account access have increased the credit footprint of Indians, enabling greater access to formal finance.
Outlining the government’s long-term ambitions, Sitharaman said India aims to contribute 25 per cent to global trade by boosting manufacturing, agriculture, value addition, and services such as tourism and hospitality. Defending corporate tax cuts, she dismissed Opposition criticism as unfair, noting that a supportive corporate ecosystem is essential for job creation and GDP growth.
She also addressed global trade challenges, stating that tariffs are increasingly being weaponised internationally. “India must negotiate carefully, leveraging its economic strength,” she said, praising the resilience of the Indian economy despite global uncertainties.
