Introduction

Table 1.3: Debt Position of the Central Government

(As a per cent of GDP)
Components Actuals
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 PR
1 2 3 4 5 6 7 8
A. Public Debt (A1+A2) 40.7 41.2 41.1 40.9 41.5 40.3 41.0
A1. Internal Debt (a+b) 37.0 37.9 37.8 38.0 38.5 37.6 38.2
a. Marketable Securities (i+ii) 32.7 33.8 34.3 34.6 34.4 33.1 32.8
(i) Dated Securities 29.7 30.8 31.3 31.8 31.7 30.9 30.6
(ii) Treasury Bills 3.1 3.0 3.0 2.8 2.6 2.2 2.3
b. Non-marketable Securities (i to vi) 4.2 4.1 3.4 3.4 4.2 4.5 5.3
(i) 14 Day Intermediate T-Bills 1.1 1.2 0.8 0.7 0.9 1.0 0.9
(ii) Compensation & Other Bonds 0.2 0.2 0.1 0.1 0.1 0.2 0.3
(iii) Securities issued to Intl. Fin. 0.3 0.3 0.3 0.4 0.8 0.7 0.6
Institutions
(iv) Securities against small savings 2.4 2.2 2.0 2.1 2.3 2.5 2.9
(v) Special Sec. against POLIF 0.2 0.2 0.2 0.2 0.2 0.1 0.1
(vi) Special Securities issued to PSB 0.0 0.0 0.0 0.0 0.0 0.0 0.5
A2. External Debt 3.7 3.3 3.3 2.9 3.0 2.7 2.9
B. Public Account - Other Liabilities 6.8 6.1 6.4 6.1 5.9 5.6 5.5
(a to d)
(a) National Small Savings Fund 0.7 0.8 1.0 0.8 0.9 0.9 0.8
(b) State Provident Fund 1.4 1.3 1.3 1.2 1.2 1.2 1.2
(c) Other Accounts 3.2 2.6 2.8 2.5 2.3 2.1 1.9
(d) Reserve Funds and Deposit (i+ii) 1.5 1.4 1.4 1.5 1.4 1.4 1.5
(i) Bearing Interest 0.9 0.8 0.8 0.9 0.9 0.8 0.9
(ii) Not bearing interest 0.7 0.6 0.5 0.6 0.5 0.5 0.6
C. Total Liabilities (A+B) 47.5 47.3 47.5 47.1 47.4 45.9 46.5

Public Debt special securities issued to National Small

1.8 Public Debt denotes liabilities payable by the
Central Government, which are contracted against
the Consolidated Fund of India, as provided under
Article 292 of the Constitution of India. Central
Government’s Public Debt was `68.8 trillion (or
41.0 per cent of GDP) as at end-March 2018. It
has been further classified under two heads, i.e.
Internal Debt and External Debt, with Internal Debt
constituting 93.0 per cent of Public Debt at end-
March 2018. Details of Public Debt are provided
in Chapter II.
Internal Debt
1.9 Internal debt of the Central Government
(`64.0 trillion, 38.2 per cent of GDP at end-March
2018) largely consists of fixed tenor and fixed
rate long-term market borrowings through the
issuance of dated securities and short-term
borrowings through treasury bills. As at end of
March 2018, outstanding amounts under dated
securities (`51.2 trillion, 30.6 per cent of GDP)
and treasury bills (`3.8 trillion, 2.3 per cent of
GDP) accounted for 74.4 per cent and 5.6 per cent,
respectively of Public Debt. The remaining items
in internal debt are the Central Government
Savings Fund (NSSF), securities issued to
international financial institutions, special
securities issued against postal insurance and
annuity funds (POLIF and RPOLIF),
compensation & other bonds and 14-day
Intermediate Treasury Bills issued to State
Governments and a few foreign central banks
for providing them an avenue to invest their
surplus cash, which together constituted around
13.0 per cent of Public Debt.
1.10 While treasury bills are issued to meet
short-term cash requirements of the Government,
dated securities are issued to mobilise longer term
resources to finance the fiscal deficit. All
marketable debt is issued through auctions as per
the schedule notified through half-yearly / quarterly
auction calendars. Issuance of dated securities is
planned and conducted taking into account the debt
management objectives of keeping cost of debt low,
while assuming prudent levels of risk and ensuring
market development. An assessment of market
liquidity conditions and market appetite for dated
securities of different maturities influence the
timing and maturity structure of primary issuances
of dated securities.

5
 Status of Government Debt

Table 1.4 : Internal Debt as per cent of Public Debt and GDP as at end-March 2018 (PR)
Components Amount As per cent of As per cent of
(in ` crore) Public Debt GDP

Internal Debt (A + B) 6401275 93.0 38.2

A. Total Marketable Debt 5509845 80.0 32.8

(i) Dated Securities 5124562 74.4 30.6

(ii) Treasury Bills 385283 5.6 2.3

B. Total Non-Marketable Debt 891430 12.9 5.3

(i) 14 Day Intermediate T-Bills 151038 2.2 0.9

(ii) Compensation & Other Bonds 51209 0.7 0.3

(iii) Securities issued to Intl. Fin. Institutions 104370 1.5 0.6

(iv) Securities against small savings 483919 7.0 2.9

(v) Special Securities against POLIF 20894 0.3 0.1

(vi) Special Securities issued to PSB 80000 1.2 0.5

External Debt respectively. With the adjustment, as explained in

1.11 External Debt (`4.83 trillion, 2.9 per cent
of GDP as at end-March 2018) constituted 7.0 per
cent of the total Public Debt of the Central
Government. As State Governments are not
empowered to contract external debt, all external
loans are contracted by the Central Government
and those intended for State Government projects
are on-lent to States7. Most of the external debt is
sourced from multilateral agencies such as
International Development Agency (IDA),
Inter national Bank for Reconstruction and
Development (IBRD), Asian Development Bank
(ADB), etc. and official bilateral agencies. There
is no borrowing from international capital markets.
The entire external debt, in terms of original
maturity, is long-term and a major part is at fixed
interest rates. A detailed analysis of external debt
is covered in Chapter II.
Public Account Liabilities
1.12 Liabilities of `9.14 trillion in the ‘Public
Account’ (5.5 per cent of GDP at end-March 2018)
include liabilities on account of National Small
Saving Fund (NSSF), State Provident Funds,
Reserve Funds and Deposits, and Other Accounts.
NSSF liabilities accounted for 14.9 per cent of total
Public Account Liabilities, while the shares of
‘Reserve Funds and Deposits’ and ‘State Provident
Fund’ were 27.6 per cent and 21.9 per cent,
7
This would require necessary correction while computing the consolidated debt for the country to remove inter-government
transactions.
para 1.5 (ii), NSSF liabilities in the Public Account
represent the total borrowings of NSSF under small
savings less the investment of NSSF in special
securities issued by the Central Government (which
is reckoned in Public Debt), State Governments
and loans to public agencies. This net liability of
the Central Government towards NSSF represents
the net gain/loss in the NSSF accumulated over
the years. Liabilities under ‘Other Accounts’
include, among others, special bonds issued to Oil
Marketing Companies (OMC), fertiliser companies
and Food Corporation of India (FCI). At end-March
2018, these liabilities under “Other Accounts”
accounted for 35.5 per cent of Public Account
Liabilities. Details of Public Account Liabilities
are discussed in Chapter III.
Fiscal Consolidation
1.13 Central Government is committed towards
fiscal consolidation in a phased manner. In India,
fiscal consolidation or the fiscal roadmap for the
Government is expressed in terms of the targets
for fiscal parameters to be realised in successive
budgets, as provided in the Fiscal Responsibility
and Budget Management (FRBM) Act, 2003. The
new FRBM framework has a twin focus on debt
and fiscal deficit. The objective is to reach a fiscal
deficit target of 3.0 per cent by 2020-21 and to
reduce the Central Government Debt to 40 per cent
of GDP by 2024-25 (Box 1).

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