Indian five hundred rupee banknotes are arranged for a photograph in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg  

Government’s Public Debt Rises By 2.53% In July-September Quarter

Public debt of the central government rose by 2.53 percent to Rs 65.65 lakh crore in the July-September quarter compared to the previous quarter.

“The Public Debt (excluding liabilities under the ‘Public Account’) of the central government provisionally increased to Rs 65,65,652 crore at end-September 2017 from Rs 64,03,138 crore at end-June 2017,” the Quarterly Report on Public Debt Management for July-September 2017 said.

Internal debt constituted 93 percent of public debt at September 2017-end, while marketable securities accounted for 82.6 percent of public debt.

About 27.8 percent of outstanding stock has a residual maturity of up to five years at end-September 2017, which implies that over the next five years, on an average, around 5.56 percent of outstanding stock needs to be repaid every year.

“Thus, rollover risk in the debt portfolio continues to be low,” the report said.

During the second quarter, the government issued dated securities worth Rs 1.89 lakh crore, higher than Rs 1.68 lakh crore in the first quarter, taking gross borrowings during the first half of 2017-18 to Rs 3.57 lakh crore, or 61.68 percent of Budget Estimate, vis-a-vis 56.8 percent of BE in the first half of 2016-17.

“The liquidity in the economy remained in surplus, due to demonetisation, during the quarter. The cash position of the government during second quarter of 2017-18 was somewhat stressed and the Centre was required to resort to W&M advances from RBI on a few occasions,” the report said.

According to the report, attempt was made to time expenditure as per receipt trends through cash management guidelines.

“Based on the assessment of prevailing and evolving liquidity conditions, RBI conducted sale of Government securities under Open Market Operations for an aggregate amount of Rs 60,000 crore during the quarter,” it said.

According to the report, G-Sec yields showed a falling trend till Aug. 3, 2017 but an increasing trend was seen thereafter.

“The trading volume of government securities on an outright basis during the second quarter of the current fiscal increased by 10.20 percent over the previous quarter.”