Government Liabilities Rise by 3.4% in Q4 2023-24

Government's total gross liabilities rose to Rs 171.78 lakh crore by March 2024 from Rs 166.14 lakh crore at December 2023-end, marking a 3.4% increase. The Public Debt Management report highlighted increased public debt and various financial trends affecting the domestic and US bond yields during the quarter.

The government's total gross liabilities surged to Rs 171.78 lakh crore by the end of March 2024, marking a rise from Rs 166.14 lakh crore at December 2023-end, the finance ministry reported. This 3.4% quarter-on-quarter increase was detailed in the Public Debt Management quarterly report for January-March 2024.

The report noted that public debt constituted 90.2% of the total gross liabilities during this period. A softened yield on Indian domestic bonds was observed, attributed to a lower than expected borrowing plan from the interim budget, adjustments to the fiscal deficit projected at 5.1% of GDP for FY25, and targeted reductions to 4.5% by FY26, alongside steady FPI inflows and inflation rates.

Conversely, US treasury yields displayed volatility, influenced by Federal Reserve actions, inflation, and employment figures, peaking at 4.33% for 10-year bonds during the quarter. The weighted average yield on new issuances reduced to 7.19% in Q4 2023-24 from 7.37% in Q3, with the average maturity of dated securities slightly moderating to 18.75 years from 18.80 years in the previous quarter. The ownership of central government securities saw commercial banks hold 37.7%, insurance companies stable at 26%, FPIs improved to 2.3%, and RBI's share declined to 12.3% by March 2024.