Since April-June (Q1) 2010-11, Public Debt Management Cell (PDMC) (earlier Middle Office), Budget Division, Department of Economic Affairs, Ministry of Finance has been bringing out a quarterly report on debt management on a regular basis. The current report pertains to the quarter April - June 2020 (Q1 FY21).

During Q1 of FY21, the Central Government issued dated securities aggregating to ₹ 3,46,000 crore as against Rs 2,21,000 crore in Q1 of FY20. The weighted average yield of primary issuances showed a sharp moderation to 5.85 per cent in Q1 FY21 from 6.70 per cent in Q4 of FY20. The weighted average maturity of new issuances of dated securities was lower at 14.61 years in Q1 of FY21 as compared to 16.87 years in Q4 of FY20. During April-June 2020, the Central Government raised Rs 80,000 crore through the issuance of Cash Management Bills. The Reserve Bank conducted one special OMO involving simultaneous purchase and sale of government securities for ₹ 10,000 crore each during the quarter ended June 2020. The net average liquidity absorption by RBI under Liquidity Adjustment Facility (LAF) including Marginal Standing Facility and Special Liquidity Facility was ₹ 4,51,045 crore during the quarter.

Total liabilities (including liabilities under the ‘Public Account’) of the Government, increased to ₹ 101,35,600 crore at end-June 2020 from ₹ 94,62,265 crore at end-March 2020. Public debt accounted for 91.1 per cent of total outstanding liabilities at end-June 2020. Nearly 28.6 per cent of the outstanding dated securities had a residual maturity of less than 5 years. The ownership pattern indicates a share of 39.0 per cent for commercial banks and 26.2 per cent for insurance companies at end-June 2020.

The yields on G-Secs showed a downward movement during the quarter ended June 2020. This reflected the impact of several developments namely a sharp decline in crude oil prices during April 2020, reduction in the repo rate by 40 bps to 4.0 per cent by the Monetary Policy Committee on May 22, 2020 and surplus liquidity conditions in the market. Central Government dated securities continued to account for a major share of total trading volumes in the secondary market with a share of 74.0 per cent in total outright trading volumes in value terms during Q1 of FY21.

To access the report, click on the following link:-

Quarterly Report on Public Debt Management – April to June 2020

Public debt management: lower government security yields and larger dated securities issuance reshaped liabilities and market liquidity. The quarterly report records increased dated securities issuance, lower weighted average yields on primary issuances, and shorter weighted average maturities for new issuances. It notes issuance of cash management bills, a special open market operation, and substantial liquidity absorption by the central bank. Public debt remains the principal component of total liabilities with a significant share of securities having short residual maturities, a concentrated ownership pattern among banks and insurers, and dominant trading share for dated securities in the secondary market.