Government's Debt rose 6% in the First Quarter (April to June) of the Current Fiscal 2011-12

According to the public debt management report released by the finance ministry on 17 August 2011, the Centre's debt rose nearly 6% in the first quarter (April to June) of the current fiscal 2011-12 but dropped as a percentage of GDP because of the revision in GDP estimates. The total public debt of the government was Rs 31.5 lakh crore at that end of June 2011 against Rs 29.7 lakh crore at the end of March 2011.

Internal debt constituted 90.3% of the total public debt. The internal debt figure increased marginally from 89.7% at the end of the January to March quarter.

India's high savings rate allows a larger share for internal debt vis-a-vis other countries. A small share of external debt is likely to improve the credibility of government debt and increases sustainability.

Smaller share of short-term debt contributes to sustainability of debt. The average maturity of outstanding stock of securities fell during the first quarter of 2011-12 to 9.58 years from 9.64 years during the previous quarter.
The report pointed out that the overall 30.9% of outstanding stock has a residual maturity of up to 5 years, which implies that over the next five years, on an average, 6.2% of outstanding stock needs to be rolled over annually. The rollover risk in the debt portfolio therefore is expected to remain low.

The gross fiscal deficit stood at 39.4% of budget estimates during the first quarter of 2011-12 compared to 10.5% at the same time in 2010. The major reason for a worsening fiscal situation is the fall in receipts, particularly nontax receipts. Revenue and non-tax receipts were at 11.5% and 9.7% of budget estimates respectively during Q1 2011-12. In comparison, revenue and non-tax receipts were 29.3% and 78.2% of budget estimates respectively during the first quarter of last fiscal.