Govt aims to reduce short-term debt, increase external debt by FY25

To minimise risks and lower borrowing costs, the Centre aims to reduce the share of short-term debt of the outstanding marketable debt stock to 11 per cent by FY25 from 12.13 per cent in FY22.

However, the Centre sees scope for increasing the share of external debt in the outstanding public debt stock to 7 per cent from 5.43 per cent during the same period.

As part of the “Status Paper on government debt”, put out by the Union finance ministry last month, the medium-term debt strategy (MTDS) aims to continue with the rationalisation of interest rates on small savings schemes and other instruments like the provident fund and special securities in line with the interest rates prevailing in the economy. It