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India’s public debt rises 3.6% to Rs63.35 trillion in June

LiveMint logoLiveMint 02-09-2017 PTI

New Delhi: India’s total public debt rose to Rs63.35 trillion till June-end, up 3.6% over the previous quarter, according to government data released on Friday.

The total public debt (excluding liabilities under the public account) of the government was Rs61.13 trillion as of March-end. “This represented a quarter-on-quarter increase of 3.6% in Q1 FY18 as compared to a decrease of 1.15% in the previous quarter,” said the Public Debt Management report released by the finance ministry.

The report gives an account of the public debt management and cash management operations during the quarter and attempts a rationale for major activities. It also tries to provide information on various aspects of debt management. Internal debt constituted 93% of public debt as of June 2017 while marketable securities accounted for 83.2%.

The report also said that liquidity conditions in the economy remained comfortable and continue to be in surplus mode during the quarter post the demonetisation. It further said the cash position of the government during Q1 of FY’17 was somewhat stressed and it took recourse to Ways and Means Advances (WMA) from the Reserve Bank of India (RBI) to tide over this temporary phase.

This was due to front-loading of expenditure by the ministries and heavy repayment of G-secs falling during the quarter, combined with low cash inflows generally seen during the first half of the year. “Overdraft was also availed briefly during the quarter,” it said.

Cash Management Bills (CMBs) of varying durations amounting to Rs1.3 lakh crore were issued during the quarter to augment the cash position of the government with CMBs of Rs40,000 crore redeemed during the quarter itself. The government’s cash account is maintained with RBI.

The cash-flow mismatches of the government are largely managed through issuance of treasury bills, access to the WMA facility from the RBI and issuance of CMBs when in deficit and through auctions of its cash balance in market (through RBI) and buybacks of securities from market, when in surplus. The limits for WMA for the first quarter of the Financial Year 2017-18 (April 2017-June 2017) was fixed at Rs60,000 crore.

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