Govt makes largest-ever payment for slashing oil bond dues

Total interest outgo to top Rs 1.6 trn, against bonds of Rs 1.44 trn since FY10

The Centre’s tax collections this year have come in handy for making roughly Rs 20,000-crore payments against oil bond dues and interest. This will lower the Centre’s interest outgo on oil bonds over the coming years and is the largest payment that has been made to date in any fiscal year for this purpose.

The worrying part, however, is that these bonds were issued when interest rates were high. According to information gathered through a right to information (RTI) application, the interest rate on these bonds range between 6.35 per cent and 8.4 per cent. 

The Centre’s collections from excise