Centre's debt grew slower than GDP: CAG

New Delhi: The central government's debt accumulation grew at a slower pace between FY21 and FY23 than the country's gross domestic product (GDP) growth, the Comptroller and Auditor General (CAG) has said, indicating "positive" debt sustainability.

"Debt sustainability, as measured by the debt sustainability indicator, was positive in 2022-23, which is a positive indicator towards stability," the CAG said in a release.

The statement comes after the supreme audit institution presented its report on the Centre's compliance of the Fiscal Responsibility and Budget Management Act, 2003, in FY23 in the Lok Sabha on Monday.

The Centre's debt-to-GDP ratio increased from 49.34% in FY19 to a peak of 61.38% in FY21, it said, thanks to a pandemic-induced spike in borrowing and contraction in economic output. However, the ratio eased to 57.93% of GDP in FY23 from 58.76% in FY22.

"Public debt repayment to public debt receipts was 89.75% in FY19 but improved in FY23, and debt repaid was 81.22% of debt acquired during the year, freeing up borrowings for productive expenditure," the CAG said in the statement.

The ratio of interest payments to revenue receipts reached its peak at 38.66% in FY21; it dropped to 33.99% in FY22 and again inched up to 35.35% in FY23.

In a separate report on the railway ministry, the CAG flagged cases of undercharges or overpayments of ₹543.17 crore. The report was presented in the Lok Sabha on Monday.