2000 – 2008
High, but Falling
Debt sat at ~75–86% of GDP. The FRBM Act (2003) capped deficits and fast growth pulled the ratio down to ~74%.
The Big Picture
The Story in Three Phases
High debt that growth pulled down, a long low plateau, then a COVID shock and slow repair.
2009 – 2019
Low Plateau
The ratio bottomed near ~68% (2010–14) as nominal growth outpaced borrowing, then crept back up to ~77%.
2020 – 2026
Shock & Consolidation
COVID spending and a shrinking economy spiked debt to ~91% (FY21) — then gradual repair back toward ~83%.
Year by Year
Vertical Timeline · 2000–2026
Debt-to-GDP each year and the year-on-year change. Red ▲ = the ratio rose (worse); green ▼ = it fell (better).
Reference Data
Year-by-Year Data Table
General-government gross debt: as a share of GDP, and the same debt in ₹ lakh crore.
| Year | Debt-to-GDP | Change (pts) | Public debt (₹ lakh cr) | Reason / Event |
|---|
Composition
Who Owes It — and in What Currency
The two facts that decide how risky the debt is: who borrowed it, and whether it's in rupees.
- ~56% Union (central) govt debt — ~₹200 L cr (FY26 RE)
- ~28% State governments' debt (% of GDP) — ~₹100 L cr
- ~95% Internal — rupee-denominated debt (owed at home)
- ~5% External — mostly low-cost multilateral / bilateral loans
State-wise · FY2024-25
How Indebted Are the States?
States borrow on top of the Centre. Combined they owe about 27.5% of GDP — but it ranges from ~14% to ~57% of each state's own output (GSDP). Small hill/north-eastern states and a few stressed states carry the heaviest loads.
| State | Debt / GSDP | Note |
|---|---|---|
| Arunachal Pradesh | ~57% | Highest ratio — very small economy |
| Punjab | ~47% | Legacy debt, weak revenues |
| Himachal Pradesh | ~45% | Hill state, small base |
| Nagaland | ~40% | Small north-eastern state |
| West Bengal | ~38% | Among the most-indebted large states |
| Bihar | ~37% | Low revenue base |
| Kerala | ~37% | High committed spending |
| Rajasthan | ~35% | Rising borrowing |
| Tamil Nadu | ~31% | Largest debt in absolute ₹ terms |
| Karnataka | ~24% | Large, broad-based economy |
| Maharashtra | ~18% | Big absolute debt, low ratio (huge economy) |
| Odisha | ~14% | Lowest ratio among major states |
- Ratio ≠ size: Maharashtra and Tamil Nadu owe the most in absolute rupees, yet their ratios are low/moderate because their economies are large. Small states show high ratios on modest absolute debt.
- Most states are meant to keep their fiscal deficit within ~3% of GSDP under their fiscal-responsibility laws; freebies, subsidies and pension costs strain the high-debt states.
The Burden & The Risk
Why Debt Matters — and What to Watch
The danger isn't a sudden default — it's the interest bill eating the budget, and high debt leaving little room for the next shock.
- ~4.8% Fiscal deficit (Centre, FY25) — what's borrowed afresh each year
- ₹11.6 L cr Interest paid in FY25 — the single biggest item in the Centre's budget
- ~37% Of the Centre's revenue eaten by interest (≈24% of all spending)
- ~₹2.05 lakh Public debt per person (₹300 L cr ÷ ~1.46 billion)
- ~12 yrs Average maturity of the debt — low rollover/refinancing risk
- ~3% Of government bonds held by foreign investors — low external exposure
- Why it stays sustainable: India's nominal GDP grows ~10% a year while the average interest cost on the debt is ~7% — so growth outpaces interest, and the debt ratio can fall even while the government keeps borrowing. See India GDP.
- Who holds it: almost entirely domestic — banks (~38%), insurers and pension/provident funds (~25%+) and the RBI (~15%); foreigners hold only ~3%. That, plus rupee debt, is why it isn't a 1991-style crisis risk.
- The real cost: interest is the single largest budget line — ~37% of the Centre's revenue — money that can't go to health, education or infrastructure.
- Don't confuse it with "external debt": India's much-quoted external debt (~$700 bn) is mostly private/commercial borrowing, not government debt.
- What to watch: if growth slows or deficits widen, the ratio climbs (as in COVID). The FRBM Act sets deficit-reduction targets; the Centre is trimming its deficit toward ~4.4%.
Global Context
How India Compares (2025)
General-government debt as a share of GDP (IMF). India is high among emerging Asia, but well below the major advanced economies.
- ~207% Japan 🇯🇵
- ~124% United States 🇺🇸
- ~99% China 🇨🇳
- ~84% India 🇮🇳
- Lower than India: Germany ~63%, Indonesia ~41%. Higher: the UK ~102%, Brazil ~93%.
- India's debt is sustainable mainly because it grows fast — but its ratio is elevated for an emerging economy, so consolidation matters.