'India’s debt-to-GDP ratio lowest among major economies': FM Sitharaman sees fiscal space, hints at rate cut

Finance Minister Nirmala Sitharaman on Monday said India stands out in debt management among major economies, with an overall debt-to-GDP ratio of about 81%, even as the global economy faces rising volatility and uncertainty, PTI reported.Speaking at an event organised by the National Institute of Public Finance and Policy (NIPFP), Sitharaman warned that the ongoing Middle East conflict has evolved into a “systemic tremor threatening vital arteries of global energy”.She said the global economic environment is increasingly marked by volatility, uncertainty, complexity and ambiguity, alongside a sharp surge in public debt across countries.“World economy witnessing volatility, uncertainty, complexity, and ambiguity; global public debt has surged,” the finance minister said.On India’s fiscal position, Sitharaman noted that the country remains relatively well-placed compared to other major economies in terms of debt sustainability.“India stands out in debt management with overall debt-to-GDP ratio at 81 per cent, lowest among major economies,” she said.The finance minister also said India has sufficient fiscal space to respond to emerging challenges.“India has fiscal space; there's room to support affected sectors, expand capex, and interest rate cut by RBI,” she said.

Sitharaman underlined that geopolitical tensions, particularly in West Asia, are not just regional disruptions but have wider implications for global energy supply chains and economic stability.“Middle East conflict evolved into systemic tremor threatening vital arteries of global energy,” she said.Her remarks come at a time when global markets are grappling with elevated crude oil prices, supply chain disruptions and tightening financial conditions driven by geopolitical conflicts.