FinMin releases consolidated status paper on government debt

General government debt-to-GDP ratio worked out to be 68.6 per cent at end-March 2016, significantly lower than historical high at 83.3 per cent in 2003-04 owing to fiscal consolidation process at centre and state level, the Finance Ministry said.
Government has been publishing a number of documents detailing overall debt position of the country, consolidated data relating to public debt, and debt management strategies of Central Government Debt (CGD), among others.
"It has now been decided to consolidate all these publications into 'Status Paper on Government Debt' Report to bring complete Government Debt and its Management related information at one place," the Ministry said.

"Overall liabilities of the Central Government as percentage of GDP have stabilised in recent years after witnessing a consistent decline since 2001-02," said the Consolidated Status Paper on Government Debt for 2016.
As per the paper, 93.8 per cent of total central government debt at end-March 2016 is denominated in India's currency.
As percentage of GDP, external debt constituted a low 3 per cent at end-March 2016, implying low currency risk to government debt portfolio and its impact on balance of payments remains insignificant.

The limited external debt is entirely from official sources, providing safety from volatility in the international financial markets, it said.

Referring to the Medium Term Debt Strategy, the paper said for the debt strategy for 2016-17 to 2018-19, "it is assumed that economy will record moderate to reasonable growth, a moderation in inflation" as per the path projected by Reserve Bank and financial stability.
"Notwithstanding global uncertainties, Indian economy is expected to remain resilient due to favourable domestic macroeconomic factors backed by stable growth with low inflation.
The Report also said there has been a compositional shift
towards marketable debt. Share of marketable securities in total internal debt increased from 43 per cent (35.8 per cent of total liabilities) in 2000-01 to 90 per cent (73.3 per cent of total liabilities) at end-March 2016.

The government is also moving toward alignment of administered interest rates with the market rates, such as interest rates on small savings, General Provident Fund and similar funds, it said.
The consolidated report provides information on various facets of debt management, such as debt profile of Central Government, Debt Management Strategy in medium term (2016-19), and data relating to public debt.
It also has a detailed discussion on the trend, composition and features of Central Government liabilities as well as consolidated General Government Debt as at end-March 2016, including a detailed discussion on State Government debt.
The Report also provides an assessment on aspects of debt sustainability and attempts to benchmark the efficiency of India's Public Debt Management on internationally accepted debt performance indicators.

Most of the public debt in India is at fixed interest rates, with only around 0.4 per cent of internal debt is floating rate debt at end-March 2016, insulating debt portfolio from interest rate volatility and providing stability to budget in terms of interest payment.
The Government is continuing its efforts to elongate the maturity profile of its debt portfolio for lower rollover risk.
Weighted average residual maturity of outstanding dated government securities at end-March 2016 was 10.50 years which is high compared to international standards.