The cumulative liability on government has risen to Rs 101.3 lakh crore by the June end 2020. It was at Rs 94.6 lakh crore at March end 2020. As per the quarterly report on public debt management, the public debt constituted 91.1 % of the total outstanding liabilities in June end 2020.

The report stated that almost 28.6% of the outstanding dated securities had a maturity (residual) of less than 5 years. The report further added that the patterns of ownership suggest that the commercial banks have a share of 39% and the insurance companies have a share of 26.2% at the end-June 2020. Dated securities worth Rs. 3.46 lakh crore was issued by the central government in the first quarter of the current fiscal year as compared to the same period one year ago. The data from the public debt management cell states that the new issuances had a weighted average maturity of 14.61 years in the quarter as compared to 16.87 in the fourth quarter of the last fiscal year.

During the April-June 2020 period when the country was going through the lockdown, the central government had issued Cash management bills and had raised Rs. 80000 crore. Cash management bills are the most flexible of the money instruments for the central government which helps in cash flow mismatches which are of temporary types. CMBs are tradable discounted instruments which have maturities of less than 91 days.

Further data points out that the RBI had conducted open market operations of a special type where simultaneous sale and purchase of government securities of Rs 10000 crore each was carried out during the quarter which ended in June 2020. During the quarter, under the liquidity adjustment facility, the net average absorption of liquidity including the Special liquidity facility and Marginal standing Facility by the RBI was at Rs 4,51,045 crore. A moderating trend has been found out in the yields of G-Sec in the first quarter. The yields have shown a rate which declined to 5.85% as compared to the weighted average yield of 6.7% in the previous quarter.

The report stated in a manner of reflection that the above show the impacts  of several developments like a conditions of surplus liquidity in the market, sharp fall in the crude oil prices during April 2020 and repo rate reduction by 40 basis points to 4 % by the Monetary policy committee on 22^nd May, 2020.

A major share of total trading volumes in the secondary market was composed of central government dated securities with a share of 74%. The gross fiscal deficit of the union government for 2020-21 has been budgeted at Rs 7,96,337crore which is around 3.5 % of the GDP when compared to the revised estimate of Rs 7,66,846 crore and the provisional estimate of Rs 9,35,635 crore for 2019-20. In the period April-June 2020, the fiscal deficit was at 83.2% of the budget estimate (BE) at Rs 6,62,363 crore vis-à-vis 61.4 % of the BE in the corresponding quarter of 2019-20.

This debt figure arrives and points worrisome trends. In December 2019, the government came out with a proposition to bring up Infrastructure projects worth around Rs 102 lakh crore, out of which 78% are to be spent by the government with 22% inputs by the private sector. With such a high himalayan amount of debt reported by the public debt management cell, the obvious question arises how exactly the 78% of the infrastructure projects will be financed by the government. In the Indian public finance majority of government borrowing is financed by the savings and the deposits in the banks, it remains to be seen whether the government will transfer the risk of the debts to the banks.