The public debt of the central government, excluding liabilities under the 'Public Account' as per provisional data increased to Rs. 66,61,038 crore in the end of December last year, the Ministry of Finance said on Thursday.
As per the ministry's quarterly report on public debt management for Q3 of FY 2017-18 (October-December 2017), the public debt rose to Rs. 66,61,038 crore from Rs. 65,80,599 crore at the end of September last year. Internal debt and marketable securities constituted 93.1 percent and 82.6 percent, respectively of the total public debt as at Demeber 2017, while about 27.4 percent of outstanding stock of government securities has a residual maturity of up to five years at the end of Decemebr 2017, implying that over the next five years, around 5.47 percent of outstanding stock, on an average, needs to be repaid every year.
During Q3 FY18, the government issued dated securities worth Rs. 1,64,000 crore, lower than Rs. 1,89,000 crore in Q2 of FY 17, thus leading to cumulative issuance of Rs. 5,21,000 crore. Auctions of both government dated securities and treasury bills were conducted smoothly during Q3 of FY 18, and the weighted average maturity (WAM) and weighted average yield (WAY) of dated securities issued during Q3 FY18 was 14.09 years and 7.04 percent, respectively.
Furthermore, the data revealed that the liquidity position in the economy remained broadly in surplus during the quarter. The cash position of the government during Q3 of FY18 was also comfortable and as a result, the government did not resort to WMA from the Reserve Bank of India.
On the other hand, yields from government-dated securities showed a hardening trend during the quarter ended December 2017. The weighted average yield (cut-off) of primary issuances of dated securities during Q3 of FY 18 was 7.04 percent as against 6.76 percent in Q2 of FY 18, reflecting hardening of yields during the quarter. This is despite the fact that surplus liquidity prevailed in the system for most part of the quarter.
However, the Ministry noted that there was some liquidity tightening towards the close of December 2017. The up-trend in government security yields reflected the impact of a number of developments (both global and domestic), such as up-trend in crude oil prices, rate hike of 25 bps by the US Federal Reserve in December 2017, higher inflation for the month of November, and announcement of extra borrowings of Rs. 73,000 crore by the government in Q4 of FY 2017-18.
The ministry also stated that the trading volume of government securities on an outright basis witnessed a decline of 21.6 percent during Q3 FY 2017-18 over the previous quarter.
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