Outstanding Liabilities of the Central Government as a percentage of GDP is a critical indicator of a country’s fiscal health. It represents the total debt obligations of the central government, expressed as a proportion of the nation’s Gross Domestic Product (GDP). This measure provides insights into the government’s borrowing burden relative to the economy’s size. A high percentage indicates significant debt accumulation, which may lead to concerns about fiscal sustainability, interest payment burdens, and potential risks to economic stability. Conversely, a lower percentage suggests a manageable debt load, allowing more flexibility for government spending and investment. Factors influencing this ratio include fiscal deficits, borrowing strategies, economic growth, and interest rate fluctuations. Governments often manage their liabilities through prudent fiscal policies, economic reforms, and debt restructuring. Sustainable debt levels enable governments to finance infrastructure, welfare programs, and development projects without excessive dependence on external borrowing. However, if liabilities grow faster than GDP, it may lead to credit rating downgrades, higher borrowing costs, and macroeconomic instability. Regular monitoring of outstanding liabilities as a percentage of GDP helps policymakers assess fiscal risks and implement corrective measures to ensure long-term economic stability and growth.

Outstanding liabilities as a percentage of GDP serve as a cornerstone indicator for assessing a nation’s fiscal sustainability and overall macroeconomic health. This ratio reveals how much the central government owes relative to the size of the economy, providing a clear picture of the country’s debt-carrying capacity. A high debt-to-GDP ratio raises red flags about the government’s ability to service its debt without resorting to inflationary financing or spending cuts, potentially undermining investor confidence and leading to higher interest rates or credit downgrades. On the other hand, a moderate or declining ratio signals sound fiscal management, leaving more room for productive public spending on infrastructure, health, education, and social welfare. This indicator also reflects the cumulative impact of past fiscal deficits and borrowing decisions, making it a vital metric for long-term fiscal planning. It is closely watched by international financial institutions, credit rating agencies, and markets, as it influences a country’s sovereign risk profile. For a fast-growing economy like India, maintaining debt at sustainable levels is essential to attract foreign investment, support development goals, and safeguard macroeconomic stability. Thus, regular analysis of outstanding liabilities relative to GDP helps policymakers balance developmental spending with fiscal discipline—an essential step toward building a resilient and self-reliant economy.