Lok Sabha Question No. 1240 (UNSTARRED), answered on 2022-07-25
Subject: Interest paid on Bonds
Ministry: FINANCE
Asked by: Pradyut Bordoloi

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO.1240

TO BE ANSWERED ON MONDAY, THE 25 TH  JULY, 2022 SRAVANA 3, 1944 (SAKA)

## Interest paid on Bonds

## 1240. SHRI PRADYUT BORDOLOI:

Will the Minister of FINANCE be pleased to state:

- (a) The  details  of  interest  paid  on  bonds  since  2014  including  absolute  numbers,  percentage share of Gross Domestic Product(GDP) and percentage share of total net tax revenue;
- (b) The details of total Government liabilities (Central Government liabilities as well as sum of Central  and  State  Government  liabilities)  since  2014  including  absolute  numbers  and percentage share of GDP;
- (c) The details of money sourced through disinvestment and dividends received from the public sector companies since 2014 including absolute numbers and percentage share of GDP;
- (d) The efforts made to operationalise the recommendation of 2017NK Singh Committee that the Central Government shall endeavour to limit the general government debt to 60 per cent of GDP and the Central Government debt to 40 per cent of GDP by 31st March, 2025; and
- (e) Whether any steps have been taken to avoid entering a debt cycle and if so, details thereof and if not, the reasons therefor?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

- (a) The  details  of  interest  paid  on  bonds  (dated  securities,  special  securities  issued  against NSSF,  Compensation  Bonds,  Special  securities  issued  to  Oil  Marketing  Companies, Fertiliser Companies and FCIs etc.) since 2014 are provided at Annexure-I .
- (b) The details of total Government liabilities (Central Government liabilities as well as sum of Central  and  State  Government  liabilities)  since  2014  including  absolute  numbers  and percentage share of GDP are provided at Annexure-II .
- (c) The details of money sourced through disinvestment and dividends received from the public sector companies since 2014 areprovided at Annexure-III.
- (d) The Government has accepted the recommendation of the Fiscal Responsibility and Budget Management  (FRBM)  Review  Committee  regarding  debt  target  with  small  modification. Section  4(1)(b)  of  the  FRBM  Act,  2003  (amended  in  2018)  states  that  the  Central Government shall endeavour to ensure that the general government debt does not exceed sixty per cent of GDP and the Central Government debt does not exceed forty per cent of GDP by the end of financial year 2024-25.

In FY 2020-21, the Central Government debt increased by more than 9 percentage points of GDP over the previous year's debt mainly on account of CoVID-19 global pandemic, which hugely  disrupted  projections  of  Government's  public  finances,  including  contraction  in GDP/denominator. The Government has announced its commitment to reduce fiscal deficit to the level below 4.5% of GDP by FY 2025-26.  Increasing the buoyancy of tax revenue through improved compliance, monetisation of assets, improving efficiency and effectiveness of public expenditure etc. are the important measures initiated by Government to control the fiscal deficit and the debt.

- (e):  The  risk  profile  of  Government's  debt  stands  out  as  safe  and  prudent  in  terms  of accepted parameters of indicator based  approach for debt sustainability.  The Government debt is held predominantly (about 95%) in domestic currency. Outstanding external debt is financed  by  multilateral  and  bilateral  agencies  at  concessional  rates.  Debt  Management Strategywhich  revolves  around  three  broad  pillars  mainly  low  cost,  risk  mitigation  and market development for Government securities has been put in place.

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## The details of interest paid on various bonds

| Financial Year   | Interest paid on bonds   | Interest paid on bonds   | Interest paid on bonds   |
|------------------|--------------------------|--------------------------|--------------------------|
| Financial Year   | ( ` in lakh crore)       | (% of GDP)               | ( %of Net Tax Revenue)   |
| 2014-15          | 3.27                     | 2.6%                     | 36.1%                    |
| 2015-16          | 3.86                     | 2.8%                     | 40.9%                    |
| 2016-17          | 4.32                     | 2.8%                     | 39.2%                    |
| 2017-18          | 4.66                     | 2.7%                     | 37.5%                    |
| 2018-19          | 5.08                     | 2.7%                     | 38.6%                    |
| 2019-20          | 5.56                     | 2.8%                     | 41.0%                    |
| 2020-21          | 6.23                     | 3.1%                     | 43.7%                    |
| 2021-22(Prov.)   | 7.31                     | 3.1%                     | 40.1%                    |

Note: GDP for FY 2019-20, 2020-21 &2021-22 as per latest estimates published by MoSPIon 31.05.2022

Annexure-I

## The details of total Government liabilities (Central Government liabilities as well as sum of Central and State Government liabilities)

| Financial Year   | Central Government liabilities   | Central Government liabilities   | Sum of Central Government and State liabilities   | Sum of Central Government and State liabilities   |
|------------------|----------------------------------|----------------------------------|---------------------------------------------------|---------------------------------------------------|
| Financial Year   | ( ` in lakh crore)               | (% of GDP)                       | ( ` in lakh crore)                                | (% of GDP)                                        |
| 2014-15          | 62.44                            | 50.1%                            | 76.27                                             | 61.2%                                             |
| 2015-16          | 69.10                            | 50.2%                            | 87.52                                             | 63.5%                                             |
| 2016-17          | 74.94                            | 48.7%                            | 99.82                                             | 64.9%                                             |
| 2017-18          | 82.87                            | 48.5%                            | 113.04                                            | 66.1%                                             |
| 2018-19          | 92.52                            | 49.0%                            | 128.09                                            | 67.8%                                             |
| 2019-20          | 105.23                           | 52.4%                            | 147.32                                            | 73.4%                                             |
| 2020-21          | 122.05                           | 61.6%                            | 170.90                                            | 86.3%                                             |
| 2021-22          | 138.88                           | 58.7%                            | 195.49                                            | 82.6%                                             |

Source:  Union  Govt.  Budget  Documents,  Union  Govt.  Finance  Account,  RBI  (State  Finances:  A  Study  of Budgets).

Note:

(i) GDP for FY 2019-20, 2020-21 & 2021-22 as per latest estimates published by MoSPI on 31.05.2022 (ii) Sum  total of the Central Government  liabilities and State Govt. liabilities excludes intergovernmental liabilities  such as  investment  in  Special  Securities  of  States  under  NSSF,  Loans  and advances from Central Govt. to State Govts.,which mainly included Back-to-Back loans etc., to avoid double counting, as the same has been included in the Central Govt. Liabilities.

(iii) Data from 2017-18 onwards includes Delhi & Puducherry.

(iv) For Central Govt., 2021-22 figures are 'provisional'. For States/UTs, 2020-21 & 2021-22 figures are their Revised Estimates & Budget Estimates of those years, respectively.

## The details of money sourced through disinvestment and dividends received from the public sector companies

|                | Receipts from disinvestment   | Receipts from disinvestment   | Dividend from the public sector companies#   | Dividend from the public sector companies#   |
|----------------|-------------------------------|-------------------------------|----------------------------------------------|----------------------------------------------|
| Year           | ( ` in lakh crore)            | (% of GDP)                    | ( ` in lakh crore)                           | (% of GDP)                                   |
| 2014-15        | 0.24                          | 0.2%                          | 0.33                                         | 0.3%                                         |
| 2015-16        | 0.24                          | 0.2%                          | 0.40                                         | 0.3%                                         |
| 2016-17        | 0.46                          | 0.3%                          | 0.53                                         | 0.3%                                         |
| 2017-18        | 1.00                          | 0.6%                          | 0.47                                         | 0.3%                                         |
| 2018-19        | 0.85                          | 0.4%                          | 0.43                                         | 0.2%                                         |
| 2019-20        | 0.50                          | 0.3%                          | 0.36                                         | 0.2%                                         |
| 2020-21        | 0.33                          | 0.2%                          | 0.40                                         | 0.2%                                         |
| 2021-22(Prov.) | 0.14                          | 0.1%                          | 0.59                                         | 0.3%                                         |

#Excluding surplus transfer by RBI and dividend from Insurance Companies & Public Sector Banks.

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