Government’s Total Gross Liabilities Increase to Rs 171.78 Lakh Crore at End of March 2024
The finance ministry recently released a report stating that the total gross liabilities of the government increased to Rs 171.78 lakh crore at the end of March 2024. This represents a 3.4 per cent quarter-on-quarter increase from the previous quarter, with public debt accounting for 90.2 per cent of the total gross liabilities.
One of the key factors contributing to the increase in liabilities was the softening of the yield on Indian domestic bonds, driven by factors such as a lower than anticipated borrowing plan, adjustments to the fiscal deficit, FPI inflows, and steady inflation. In contrast, US treasury yields remained volatile during the quarter, influenced by Federal Reserve actions, inflation, and employment data.
Despite the volatility in US treasury yields, the weighted average yield on new issuances in Q4 2023-24 decreased to 7.19 per cent from 7.37 per cent in the previous quarter. Additionally, the weighted average maturity of issuances of dated securities slightly decreased to 18.75 years, while the weighted average maturity of outstanding stock of dated securities increased to 12.54 years.
The ownership pattern of central government securities also saw some changes, with the share of commercial banks increasing to 37.7 per cent, insurance companies maintaining a 26.0 per cent share, and FPIs’ share improving to 2.3 per cent. However, the share of RBI continued to decline, reaching 12.3 per cent at the end of March 2024.
Overall, the report highlights the various factors influencing the government’s liabilities and the changing ownership patterns of central government securities. It will be interesting to see how these trends evolve in the coming quarters and the impact they may have on the country’s overall financial stability.
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