Public debt accounts for 91% of Centre's Rs 94-trillion liabilities

The government’s total liabilities increased 0.8 per cent to Rs 94.62 trillion at March-end 2020 as compared to the preceding quarter, a finance ministry report said on Tuesday.

Public debt accounted for 90.9 per cent of total outstanding liabilities as on March 31, 2020, said the quarterly report on Public Debt Management.

“Total liabilities (including liabilities under ‘Public Account’) of the Government, as per provisional data, increased to Rs 94,62,265 crore at end-March 2020 from Rs 93,89,267 crore at end-December 2019,” it said.

According to the report, the weighted average yield of primary issuances moderated further to 6.70 per cent during March quarter from 6.86 per cent in October-December.

The proportion of debt (dated securities) maturing in less than one year was lower at 3.90 per cent at end-March 2020. It was 6.64 per cent as on at December 31, 2019.

The proportion of debt maturing within 1-5 years at 25.07 per cent at end-March 2020 was almost close to its level of 25.09 per cent on December 31. Debt maturing in the next five years worked out to around 29.0 per cent of total outstanding debt at end-March 2020.

Further, the holding pattern of central government securities indicated that the share of commercial banks stood at 40.4 per cent at end-March 2020, marginally higher than 40.3 per cent as on March 31, 2019.

The share of insurance companies showed an improvement from 24.3 per cent at end-March 2019 to 25.1 per cent as of March 31, 2020, the report said.

During fourth quarter of the last fiscal, the central government issued dated securities aggregating to Rs 76,000 crore as against Rs 1,56,000 crore in January-March 2018-19.

During January–March, the government raised Rs 2.3 trillion through the issuance of Cash Management Bills. The Reserve Bank conducted OMOs/Special OMOs to inject liquidity into the system during the quarter ended March 2020.

The net average liquidity absorption by RBI under Liquidity Adjustment Facility (LAF) including MSF was Rs 3,03,464 crore during the quarter.

The report also said that the yields on G-Sec hardened during January 2020 due to sharper than expected rise in CPI-based inflation to a 65-month high of 7.35 per cent in December from 5.40 per cent in November, which dented the hope of a rate cut in RBI's monetary policy review in February 2020.