Central government debt
- How often
- Every yearUnion Budget, 1 February
- Next release
- Mon 1 FebIn 81 days · expected · 11:00 AM
2026-27, down from 56.1% in 2025-26.
Events on this chart
Source: Union Budget, released 1 Feb 2026 · Chart: Clarity UPSC
- Previous
- 56.1%2025-26
- Highest
- 61.4%2020-21
- Lowest
- 48.9%2017-18
10 readings since 2017-18.
Story
What the Centre owes, as a share of Gross Domestic Product (GDP). The target is 50% (±1) by March 2031.
What is happening now As of 2026-27
The Union Budget 2026-27 expects central government debt to fall to 55.6% of Gross Domestic Product (GDP) by 31 March 2027, from 56.1% a year earlier (revised estimate) and 56.2% in 2024-25. These figures use the definition in the Fiscal Responsibility and Budget Management (FRBM) Act. They include state government securities held by the National Small Savings Fund (NSSF), which the states will repay; leaving those out, debt is 55.1% of GDP.
The target is 50% of GDP, within one point either way, by 31 March 2031. The Budget uses the fiscal deficit, set at 4.3% of GDP for 2026-27, to keep debt on that falling path. Interest payments are budgeted at ₹14.04 lakh crore in 2026-27, against ₹12.76 lakh crore budgeted a year earlier.
Why it matters
Central government debt is the sum of the Centre's past borrowing that it has not yet repaid. Interest on it is one of the largest items in the Budget, so a high debt leaves less money for schools, health, defence and roads. The Budget says that a falling debt ratio will gradually free money for priority spending by cutting interest payments.
Debt that is already high also leaves less room to borrow when a crisis strikes, as in the pandemic year 2020-21, when the ratio jumped. From 2026-27 the debt ratio is the main target of fiscal policy, and each year's fiscal deficit is chosen to keep it falling.
What it is
Central government debt is everything the Centre owes. Most of it is borrowed at home: government securities and Treasury Bills sold in the market, and money drawn from small savings and provident funds. Foreign liabilities are about 3% of the total.
The Union Budget reports the debt as a share of Gross Domestic Product (GDP), using the definition in the Fiscal Responsibility and Budget Management (FRBM) Act. That definition values external debt at current exchange rates and counts liabilities from extra-budgetary resources: money that other public bodies borrow on the government's behalf.
Each year's fiscal deficit adds to the debt. The ratio falls when GDP grows faster than the debt, so smaller deficits and faster growth both bring it down. Lower debt means lower interest payments, which take about 20 paise of every rupee the Centre spends.
Read this number
- The publisher
- The Ministry of Finance presents the Union Budget to Parliament every year, usually on 1 February, with targets for spending, receipts and borrowing.
Terms on this page (3)
- FRBM
- Fiscal Responsibility and Budget Management
- GDP
- Gross Domestic Product
- NSSF
- National Small Savings Fund
History
- 24 Jul 1991The crisis Budget puts the Centre's internal public debt at about 55% of Gross Domestic Product (GDP), with interest taking almost 20% of its spending.
- 5 Jul 2004The Fiscal Responsibility and Budget Management (FRBM) Act, 2003 and the FRBM Rules, 2004 come into force.
- 2018The 2018-19 Budget amends the FRBM Act through the Finance Bill to adopt a debt rule: central government debt to come down to 40% of GDP, with the fiscal deficit as the key operational target.
- 2020-21Debt jumps to 61.4% of GDP as the pandemic year's deficit swells.
- 23 Jul 2024The Budget announces that from 2026-27 the deficit will be set each year to keep debt falling as a share of GDP.
- 1 Feb 2025The 2025-26 Budget sets the target: debt of 50% of GDP, within one point either way, by 2030-31.
Readings
| Period | Value | Status | Released |
|---|---|---|---|
| 2026-27 | 55.6% | Budget estimate | 1 Feb 2026 |
| 2025-26 | 56.1% | Revised | 1 Feb 2026 |
| 2024-25 | 56.2% | Final | 1 Feb 2026 |
| 2023-24 | 57.0% | Final | 1 Feb 2026 |
| 2022-23 | 58.1% | Final | 1 Feb 2026 |
| 2021-22 | 58.8% | Final | 1 Feb 2026 |
| 2020-21 | 61.4% | Final | 1 Feb 2026 |
| 2019-20 | 52.3% | Final | 1 Feb 2026 |
| 2018-19 | 49.3% | Final | 1 Feb 2026 |
| 2017-18 | 48.9% | Final | 1 Feb 2026 |
For UPSC
Know the Fiscal Responsibility and Budget Management (FRBM) Act, 2003, the 2018 debt rule, which set ceilings of 40% of Gross Domestic Product (GDP) for the Centre and 60% for general government, and the move to a debt anchor of 50 ± 1% of GDP by 2030-31, with the fiscal deficit as the operational target.