Govt’s public debt rises 3% in Q2

Internal debt constituted 92.3% of public debt as at September end, while marketable securities accounted for 83.4% of public debt


Net market borrowings during first half of ongoing fiscal year is at Rs124,777 crore. Photo: Pradeep Gaur/Mint
Net market borrowings during first half of ongoing fiscal year is at Rs124,777 crore. Photo: Pradeep Gaur/Mint

New Delhi: The public debt of the central government rose 3% in the July-September quarter compared to the previous quarter. “The Public Debt (excluding liabilities under the ‘Public Account’) of the central government provisionally increased by 3% in second quarter of 2016-17 on quarter-on-quarter (Q-o-Q) basis,” said the Quarterly Report on Debt Management for July-September 2016.

Internal debt constituted 92.3% of public debt as at end-September 2016, while marketable securities accounted for 83.4% of public debt. About 26.2% of outstanding stock has a residual maturity of up to 5 years, which implies that over the next five years, on an average, around 5.6% of outstanding stock needs to be rolled over every year. “Thus, the rollover risk in debt portfolio continues to be low. The implementation of budgeted buyback/switches in coming months is expected to reduce rollover risk further,” the report said.

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During the second quarter of the fiscal, the government issued dated securities worth Rs1.76 lakh crore, taking gross borrowings during first half of 2016-17 to Rs3.41 lakh crore, or 56.8% of Budget Estimate (BE), vis-a-vis 58.5% of BE in first half of 2015-16. “Net market borrowings during first half of ongoing fiscal year was at Rs124,777 crore, 55.1% of BE. Auctions, both government dated securities and treasury bills, during second quarter of 2016-17 were held in accordance with the pre-announced issuance calendar,” the report said.

According to the report, G-sec yields declined sharply across the curve during the quarter, with 10 year segment gaining the most, on the back of softening of crude prices, increase in risk appetite globally after sharp correction post Brexit, passage of GST Bill by Upper House of Parliament, liquidity easing measures of RBI, expectation of rate cut from RBI, etc. “The trading volume of government securities on an outright basis during the second quarter of 2016-17 increased by 78.45% over the previous quarter,” it said.

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