Public debt dips marginally to Rs 55.73 lakh cr in Q4 FY16

India’s public debt declined marginally to Rs 55.73 lakh crore at the end of March 2016 (Q4), showing a quarter-on-quarter reduction of 0.04 per cent.

The debt (excluding liabilities under the Public Account) of the government was Rs 55.75 lakh crore at the end of December.

Internal debt constituted 92 per cent of public debt, as compared with 92.3 per cent in the previous quarter, a quarterly report on debt management released by the Finance Ministry on Monday said.

KEY TAKEAWAYS

• Internal debt was 92% of public debt, as against 92.3% in December quarter
   
• Gross and net market borrowing requirements for FY16 were Rs 5.85 lakh crore and Rs 4.40 lakh crore, respectively
  

 

Marketable securities accounted for 84.8% of total public debt, as compared with 85% as on end-December 2015
 

Outstanding internal debt of govt at Rs 5,130,179 crore was 37.8% of GDP at end-March 2016, compared to 38.7% of GDP at end-December 2015

With regard to domestic borrowing, it said gross and net market borrowing requirements of the government for 2015-16 (FY16) were revised lower to Rs 5.85 lakh crore and Rs 4.40 lakh crore, which were lower by 1.18 per cent and 2.75 per cent, respectively, than Rs 5.92 lakh crore and Rs 4.53 lakh crore in the previous financial year.

“The cash position of the government during the Q4 of FY16 was comfortable and remained in surplus mode during the quarter. The issuance amount under Treasury bills was also broadly as per calendar,” it said.

It further said marketable securities (consisting of rupee denominated dated securities and treasury bills) accounted for 84.8 per cent of total public debt, as compared with 85 per cent as on end-December 2015.

The outstanding internal debt of the government at Rs 5,130,179 crore constituted 37.8 per cent of GDP at end-March 2016 as compared with 38.7 per cent of GDP at end-December 2015, it said.

During the quarter G-sec yields witnessed significant intra-quarter movements.

G-Sec market opened the quarter on weak note tracking the depreciating domestic currency and local equity market.

“The market sentiment was adversely affected in February due to higher than expected inflation numbers, hardening bias in US Treasuries, higher borrowings of states, uncertainties over issuance of UDAYA bonds, etc., and 10-year G-sec yield touched a high of 7.85 per cent, general levels last seen in June 2015,” it said.

“Since February end, the market reversed its direction and gained significantly post budget on positive market sentiment. 10 Yr benchmark paper closed the quarter at 7.46 per cent, lowest yield level since July 2013 as against 7.69 per cent on December 31, 2015,” he said.

In Q4 FY16, central government dated securities continued to account for a dominant portion of total trading volumes.

Net inflows in the form of foreign direct investment (FDI) were robust in Q4 FY16 (Jan-Feb), more than sufficient to fund the external financing requirement.

During 2015-16 (up to end-March 2016), there has been an accretion of $18.54 billion to the foreign exchange reserves which touched $360.1762 billion at end-March 2016.