Fiscal prudence helps govt save ₹75,000 crore

THE CENTRE HAS managed to save around ₹75,000 crore in interest cost due to its focus on transparency and prudent fiscal management between FY20 and FY24 which moderated yields of the government securities (G-secs).

- PRASANTA SAHU

The weighted average yield of fresh borrowing of the Centre declined from a high of 8.42% in 2013-14 to 6.96% in 2024-25 as of February 10, 2025. The yield reduction-induced saving was huge around ₹75,000 crore during FY20 and FY24, an official told FE.

The interest saving helped the Centre contain the committed revenue expenditure, which is already very high.

The interest cost of the Centre is likely to rise to 25.2% of the budget size in FY26 from 24% in FY25 revised estimate, reflecting the surge in accumulation of debt after the Covid pandemic.