Govt’s public debt up 3% in Q2 of FY17

Public debt (excluding liabilities under the 'Public Account') of the central government provisionally increased by 3.0 per cent in Q2 of the current financial year (2016-17) compared to the previous quarter  (Q1 of FY16-17), official data released today showed.

During Q2 of FY17, the government issued dated securities worth Rs1,76,000 crore, taking the gross borrowings during H1 FY17 to Rs3,41,000 crore or 56.8 per cent of budget estimates, against 58.5 per cent of budget estimates in H1 of FY 16.

Net market borrowings during H1 FY 17 stood at Rs1,24,777crore, ie, 55.1 per cent of budget estimates.

Internal debt constituted 92.3 per cent of the government's public debt as of end-September 2016, while marketable securities accounted for 83.4 per cent of public debt. About 26.2 per cent of outstanding stock had a residual maturity of up to 5 years as of end-September 2016, which implies that over the next five years, on an average, around 5.6 per cent of outstanding stock needs to be rolled over every year. Thus, the rollover risk in the debt portfolio continues to be low. The implementation of budgeted buy back/ switches in coming period is expected to reduce roll over risk further.

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.

Trading volume of government securities on an outright basis during Q2 FY 17 increase by 78.45 per cent over the previous quarter.