The longer maturity of government bonds -- over one-third of about Rs 27 lakh crore of India's public debt is slated to mature beyond 10 years -- is a result of conscious debt strategy, the Finance Ministry said.

"The relatively high average maturity of government bonds is the result of conscious debt strategy, demand pattern and market development initiatives," the ministry said in its quarterly report on public debt management.

The average maturity of outstanding stock of dated securities that accounts for 72 per cent of the total public debt was 9.71 years at June-end 2010. This is higher than the end-March figure of 9.67 years, the report said.
    
The longer maturity was possible due to the strong demand by insurance and provident fund players, it added.
    
"About 34 per cent of the stock has a maturity in excess of 10 years, a consequence of the robust demand from insurance companies and retirement funds for long-tenor bonds," it said.
    
The holding pattern of government securities on March-end showed banks were in the major investor category with 51 per cent of the holding, followed by long-term investors like insurance and provident funds with 29 per cent of total holding.
    
Of the total public debt of Rs 26,97,940 crore, the total outstanding dated securities stood at Rs 19,41,595 crore. The total public debt increased by more than Rs 1 lakh crore in April-June quarter from Rs 25,92,945 crore at March-end this year.
    
About 28 per cent of outstanding stock has a residual maturity of up to 5 years, which implies that over the next 5 years, on an average, only about 6 per cent of outstanding stock needs to be rolled over every year.
    
"The low rollover is a conscious debt strategy," the ministry said, adding it has also been a conscious policy to maintain issuance up to 30 years to develop a long-term and liquid yield curve.

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