Total liabilities of the government increased by 5.6 per cent to Rs 107.04 lakh crore at end-September 2020, according to official data on public debt. At the end of the first quarter, the outstanding total debt of the government stood at Rs 101.3 lakh crore.
The 5.6 per cent quarter-on-quarter increase reflects pressure on revenue collection and rising expenditure due to the COVID-19 crisis. Public debt accounted for 91.1 per cent of total outstanding liabilities at end-September 2020, as per the latest quarterly report on public debt management.
The weighted average yield on primary issuances of dated securities showed further moderation to 5.80 per cent in Q2 of FY21 from 5.85 per cent in Q1 FY21, it said. During Q2 FY21, 13 tranches of auctions were held for issuance of dated securities aggregating to Rs 4,20,000 crore, which was slightly more than the pre-announced calendar because of exercising of greenshoe option, it said.
The central government issued dated securities worth Rs 3,46,000 crore in the first quarter as against Rs 2,21,000 crore in the same period a year ago. The ownership pattern of central government securities shows that the share of commercial banks stood at 38.6 per cent at end-September 2020, lower than 40.4 per cent at end-March 2020.
“The share of insurance companies and provident funds at end-September 2020 stood at 25.3 per cent and 4.8 per cent, respectively. The share of mutual funds increased from 2.0 per cent at end-June 2020 to 2.4 per cent at end-September 2020," it said. During Q2, yields on government securities hardened due to apprehension about the Centre further raising the borrowing from revised target of Rs 12 lakh crore amid the strained fiscal position, MPC decision to keep policy rate unchanged in its meeting held on August 4, geo-political issue with China and higher retail inflation data, it said.
The yield on 10-year benchmark security opened at 5.84 per cent at the beginning of the quarter and closed at 6.02 per cent at end of the quarter in September.