Government’s total public debt India

Government’s total public debt India





The total public debt of the Government marginally decreased to Rs.4, 625,037 crore at end-March 2014 from Rs.4, 629,689 crore at end December 2013 accounting for (QoQ) decline of 0.1% (provisional) compared with an increase of 3.1% in the previous quarter (Q3 of FY13).
Government Finances— The gross fiscal deficit of the Central Government in revised estimates (RE) 2013-14 (FY14) was placed at Rs.5,24,539 crore (4.6% of GDP) as against budgeted level of Rs.5,42,499 crore (4.8% of GDP). The gross and net market borrowing requirements of the Government were, however, reduced in RE for FY14 to Rs.5, 63,911 crore and Rs.4, 68,902 crore from budgeted levels of Rs.5, 79,009 crore and Rs.4, 84,000 crore, respectively. Gross fiscal deficit for FY15 is budgeted (in interim budget 2014-15) at Rs.5, 28,631 crore (4.1% of GDP) with corresponding gross and net market borrowings at Rs.5, 97,000 crore and Rs.4, 57,321 crore, respectively.
During the year 2013-14 (April-Feb), within the direct taxes, collections from corporation tax at Rs.2,86,572 crore showed a growth rate of 11.1% as against 10.5% growth projected in RE, personal income tax collections at Rs.1,84,019 crore showed a robust growth rate of 20.2% against 20.0% growth rate in RE for FY14. However, the fiscal outcome during April-February of FY14 on other fiscal indicators widened as percentage of revised estimates (RE), vis-a-vis their position during the same period of the previous fiscal. Gross tax collections during the period at 77.0% of RE were lower than 78.3% a year ago. Service tax collections increased by 18.4% during the period under discussion as compared to growth of 24.4% projected in the RE of 2013-14. Non-tax revenue as% of RE were lower in April-February 2014 as compared with same period of previous year.
Total expenditure during April-February 2013-14 at 88% of RE was higher than 85.2% during the same period of previous year. As a result of higher expenditure and lower revenue collections, revenue deficit and fiscal deficit during April-February 2013-14 at 117.3% and 114.3% of RE were higher than 101.2% and 97.2%, respectively, during the same period a year ago. However provisional information on revenues realised during March 2014 on account of higher than expected 2G auction realisation, PSE ETF sale, revenues etc suggest that RE target of 4.6% would be achieved in 2013-14.
Outstanding Public Debt— The total public debt (excluding liabilities under the ‘Public Account’) of the Government marginally decreased to Rs.4, 625,037 crore at end-March 2014 from Rs.4, 629,689 crore at end December 2013. This represented a quarter-on-quarter (QoQ) decline of 0.1% (provisional) compared with an increase of 3.1% in the previous quarter (Q3 of FY13). Internal debt constituted 91.1% of public debt as compared with 91% at the end of the previous quarter. Marketable securities (consisting of Rupee denominated dated securities and treasury bills) accounted for 83.3% of total public debt, almost same level as on end-December 2013. The outstanding internal debt of the Government at Rs.4, 212,575 crore constituted 37.2% of GDP as compared with 38% at end December 2013.
As compare to the previous quarter, bonds yields marginally moderated over the curve. At the longer end, the curve was flat at end quarter. As a result, the yield curve flattened during the quarter in above 10-year maturities, while steepening in maturities below 10 years. Moreover, yield curve showed inversions at a few maturity points. The 1yr-10yr spread increased to 33 bps at end-March 2014 from 13 bps at end-December 2013, while 10yr-30yr spread declined to 23 bps from 39 bps over the same period. Overall, the 1yr-30yr spread at end of Q4 of FY14 increased to 56 bps from 53 bps at the end of the previous quarter. The measures taken by RBI to address tightened liquidity conditions like conduct of term repos of appropriate amount and tenor, helped shift downward the treasury bills yields curve during the quarter.

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