Govt's total liabilities rise by 0.8% to Rs 94.62 trillion in Q4FY20

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 trillion at end-March 2020 from Rs 93.9 trillion at end-December 2019," it said.

As per 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 trillion in January-March 2018-19.

During January-March 2020, 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 3.04 trillion 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.

However, there was some moderation in G-Sec yields in response to an announcement relating to the fourth round of special OMOs, higher than expected cut-off price for the 10-year benchmark security at special OMO auction on January 23, 2020 and decline in crude oil prices, it added.

The Reserve Bank in its monetary policy announcement on February 6, 2020 kept the policy repo rate unchanged at 5.15 per cent and retained its accommodative policy stance.

"However the market reacted positively to RBI's announcement to conduct long-term repo operations up to Rs 1 trillion with a view to allow banks to borrow at the repo rate for tenors of 1 and 3 years," it said.

The sharp fall in crude oil prices and in the US Treasury yields also contributed to softening of yields on G-Secs in the domestic market.

However, FPIs started reducing their investment in central government securities in the wake of uncertainty relating to the impact of coronavirus on the global economy, it noted.

Since the first quarter of 2010-11, the Ministry of Finance has been bringing out a quarterly report on debt management on a regular basis.