June 28th 2024.
In a recent report released by the finance ministry, it was revealed that the total gross liabilities of the government have increased to Rs 171.78 lakh crore by the end of March 2024, up from Rs 166.14 lakh crore at the end of December 2023. This represents a 3.4% increase in the fourth quarter of 2023-24, according to the public debt management quarterly report.
During this quarter, public debt accounted for 90.2% of the total gross liabilities. The report also stated that the yield on Indian domestic bonds has softened, thanks to factors such as a lower borrowing plan announced in the interim budget, a targeted reduction of fiscal deficit to 4.5% by FY26, and steady inflation.
In contrast, the report noted that US treasury yields remained volatile during the quarter, influenced by the actions of the Federal Reserve, inflation, and employment data. At one point, the US 10-year yields even reached a high of 4.33%.
The overall weighted average yield softened to 7.19% in Q4 2023-24, compared to 7.37% in the previous quarter, due to new issuances. Additionally, the report highlighted that the weighted average maturity of dated securities issued during the quarter was 18.75 years, while the weighted average maturity of the outstanding stock of dated securities increased to 12.54 years by the end of Q4 of 2023-24.
The report also provided insights into the ownership pattern of central government securities. It showed that the share of commercial banks in these securities surged to 37.7% by the end of March 2024, up from 36.6% in March 2023. Similarly, the share of insurance companies remained constant at 26.0%, while the share of Foreign Portfolio Investors (FPIs) improved to 2.3% in March 2024 from 1.4% in March 2023.
However, it was noted that the share of the Reserve Bank of India (RBI) continued to decline, reaching 12.3% by the end of March 2024, compared to 14.3% during the same period in the previous year. These figures indicate a shift in the ownership pattern of central government securities.
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