NEW DELHI: Another sign of the deteriorating fiscal position of the country, the total central government debt at the end of fiscal year 2020-21 reached 58.73 percent of GDP, the highest since 2007-08 when the debt-to-GDP ratio was 58.86 percent.
Total government debt reached Rs 116.2 lakh crore as of March 31, 2021, registering a 6.36% jump in the January-March quarter, according to a finance ministry report. At the end of December 2020, the total debt stood at Rs 109.2 lakh crore.
In 2019-2020, the ratio was 48.6%. Total government borrowing in the market also exceeded the revised budget estimate by Rs 12.74 lakh crore for FY21. The government had to borrow Rs 13.20 lakh crore to finance part of the budget deficit of Rs 18.21 lakh crore. The rest of the budget deficit is financed by money collected through small savings plans and external aid.
During the January to March 2020-2021 quarter, the Center issued government bonds worth Rs 3 20,349 crore against Rs 76,000 crore in the quarter last year. As a result, the rate at which the government borrowed in the fourth quarter also fell from 5.68% in the October-December 2020 quarter to 5.80%.
âYields on government securities tightened in the secondary market due to the increased supply of G-sec during the quarter. In addition, the tightening of yields has occurred more on the short end of the curve due to the increase in weekly borrowing and the announcement of the resumption of liquidity in RBI operations, âthe ministry report said. finances.
The country’s total public debt (Central and States) is expected to have reached 90% of GDP in 2020-21, the highest on record. In 2019-2020, the ratio of total public debt to GDP was 70%.