Alarmed by surge in Centre's liabilities at Rs 2,231,886 crore (Rs 22,318.86 billion), the Economic Survey on Monday said bringing down interest outgo was critical for improving government finances, ensuring higher growth and economic stability.
"Bringing down the average cost of borrowing and reducing the interest outgo are critical to fiscal consolidation, growth and macro-economic stability," the Survey tabled in Parliament said.
"Persistent and high deficits seriously impair counter cyclical ability of fiscal policy, lead to unsustainable debt build up and adversely affect composition of expenditure through larger and larger interest outgo," it said.
Reeling out figures, it said the Centre's internal debt will rise to Rs 21,68,671 crore (Rs 21,686.71 billion) this fiscal from Rs 19,27,155 crore (Rs 19,271.55 billion) in 2004-05, while external debt was pegged at Rs 63,215 crore (Rs 632.15 billion) compared to Rs 54,359 crore (Rs 543.59 billion) last year.
Total outstanding liabilities of the Centre was pegged at Rs 22,31,886 crore (Rs 22,318.86 billion) for 2005-06, up from Rs 19,81,514 crore (Rs 19,815.14 billion) in 2004-05.
However, the liabilities as a percentage of GDP will come down marginally to 63.2 per cent in 2005-06 from 63.5 per cent a year ago, the Survey said.
While internal debt is slated to slide from 61.7 per cent of GDP in 2004-05 to 61.4 per cent this fiscal, the external debt will rise marginally to 1.8 per cent of GDP.
Among the internal liabilities, the Survey said net market borrowing was pegged at Rs 1,03,695 crore (Rs 1,036.95 billion) this fiscal.
Considering the repayment of debts worth Rs 61,676 (Rs 616.76 billion), the gross market borrowing is slated to be Rs 1,65,467 (Rs 1,654.67 billion).
