Centre's debt touches 56.2% of GDP in first half of FY21, shows data

Outstanding debt was Rs 107.04 trn, 13.12% more than Rs 94.62 trn at FY20-end

The Union government’s debt has touched 56.2 per cent of gross domestic product (GDP) as on September 30 this fiscal year against 46.5 per cent at the end of 2019-20.
 

It should be noted that for the purpose of calculating debt as a proportion of GDP, the size of the economy in the second half of 2019-20 is also taken into consideration.
 

The states’ outstanding liabilities were 25.8 per cent as of March 2020. If one conservatively assumes that the trend is maintained as of September-end this fiscal year, the outstanding liabilities of the Centre and the states could be around 80 per cent.

The debts of the states and the Centre are not added because there is a portion common to both.
 

“With debt being raised to counteract the revenue shock and a contraction in GDP in the first half of 2020-21, a rise in the public debt to GDP ratio is unavoidable,” said Aditi Nayar, principal economist, ICRA.
 

There are various estimates of general debt — comprising the outstanding liabilities of the Union government and the states for 2020-21. These range from 84 per cent to 90 per cent of GDP.
 

The Medium Term Fiscal Policy cum Fiscal Policy Strategy Statement, tabled along with the Budget papers in February 2020, estimated the Centre’s debt at 50.1 per cent of GDP in 2020-21.

 

In absolute terms, the outstanding debt of the Union government stood at Rs 107.04 trillion at the end of September in 2020-21, 13.12 per cent higher than the Rs 94.62 trillion at the end of 2019-20. If quarterly comparison is made, the outstanding debt was 5.6 per cent higher than the Rs 101.35 trillion at the end of June 2020-21, showed the “Public Debt Report”, released by the Department of Economic Affairs on Thursday.
 

Public debt at Rs 97.46 trillion accounted for 91.1 per cent of the liabilities of the Union government as on September 30. This also rose by 5.6 per cent over the Rs 92.28 trillion at the end of June 2020-21.
 

Within public debt, market borrowing constituted the most at Rs 66.21 trillion at the end of the first half of the current fiscal year. This was 6.8 per cent higher than the Rs 62 trillion at the end of the first quarter.
 

The government has raised its market borrowing from Rs 7.8 trillion, pegged in the Budget for 2020-21, to Rs 12 trillion.
 

The other main component of public debt is borrowing from the National Small Savings Fund Organisation. Securities against small savings rose by 2.7 per cent to Rs 8.9 trillion at the end of H1 of 2020-21 from Rs 8.76 trillion.
 

External debt rose to Rs 6.3 trillion as on September 30 this financial year, up 0.9 per cent from the Rs 6.25 trillion as on June 30.