NEW DELHI: In another sign of the country's worsening fiscal situation, the Central government's total debt at the end of financial year 2020-21 has reached 58.73 per cent of the GDP, the highest since 2007-08 when the debt-to-GDP ratio was 58.86 per cent.
The government's total debt reached Rs 116.2 lakh crore as on 31 March 2021, registering a 6.36 per cent jump in the January-March quarter, according to a finance ministry report. At the end of December 2020, total debt stood at Rs 109.2 lakh crore.
In 2019-20, the ratio was 48.6 per cent. The government’s total market borrowings also exceeded the revised budget estimate of Rs 12.74 lakh crore for FY21. The government had to borrow Rs 13.20 lakh crore to finance a part of the fiscal deficit of Rs 18.21 lakh crore. Rest of the fiscal deficit is financed by money collected through small savings schemes and external assistance.
During the January-March quarter of 2020-21, the Centre issued government bonds worth Rs 3,20,349 crore against Rs 76,000 crore in the year-ago quarter. Consequently, the rate at which the government borrowed during the fourth quarter also increased from 5.68 per cent in the October-December 2020 quarter to 5.80%.
"Yields on government securities hardened in the secondary market due to increase in supply of G-secs during the quarter. Further, hardening of yields was more on the short end of curve due to increase in weekly borrowing and also announcement of resumption of normal liquidity operations by the RBI," the Finance Ministry report said.
The country's total public debt (Centre and States) is likely to have touched 90 per cent of the GDP in 2020-21, the highest ever recorded. In 2019-20, the total public debt to GDP ratio was 70 per cent.