The general government debt surged to 89.4% of the GDP in FY21, significantly higher than the Fiscal Responsibility and Budget Management (FRBM) target of 60%, and could pose risks for medium-term macroeconomic stability.
As a result, the interest payment on government debt has risen once again.
In fact, all states, barring Maharashtra and Delhi, have higher debt-to-GSDP than the N K Singh panel’s recommendation of 20%.