Lok Sabha Question No. 1236 (UNSTARRED), answered on 2022-07-25
Subject: Government Debt
Ministry: FINANCE
Asked by: Su Thirunavukkarasar, Ravneet Singh, V. Kalanidhi

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO.1236 TO BE ANSWERED ON MONDAY, THE 25 TH JULY, 2022 SRAVANA 3, 1944 (SAKA)

## Government Debt

## 1236. SHRI THIRUNAVUKKARASAR SU: SHRI RAVNEET SINGH BITTU: DR. KALANIDHI VEERASWAMY:

Will the Minister of FINANCE be pleased to state:

- (a) Whether  according  to  the  latest  Public  Debt  Management,  the  total  liabilities  of  the Government rose 3.74 percent to Rs.133.22 lakh crore in March, 2022 from 128.41 lakh crore in December, 2021;
- (b) If  so,  the  details  thereof  during the last four  years and the current  year, year-wise along with the reasons for such steep rise in Government's total liabilities;
- (c) Whether any steps are being taken by the Government to reduce the liability burden and to improve the reserves;
- (d) If so, the details thereof; and
- (e) If not, the reasons therefor?

## ANSWER

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

(a):  Quarterly  report  on  Public  Debt  Management  mainly  depicts  information  of  Government's debt  /  liability  contracted  on  the  Consolidate  Fund  of  India  and  Public  Account  of  India  for managing  Central  Government's  fiscal  operations.  Therefore,  the  Public  Account  liabilities  on account  of  investment  in  Special  Securities  of  States  under  NSSF  etc.  (which  are  actually liabilities  of  the  concerned  State  Government(s))  are  excluded.  The  external  debt  is  shown  at current exchange rate including SDR allocation of India. As per latest quarterly report on Public Debt Management, the total liabilities/debt of the Government depicted in line with above, has risen from Rs.128.41 lakh crore at the end of Dec. 2021 to Rs. 133.22 lakh crore at the end of March, 2022 i.e. an increase of 3.74 per cent. The information provided in the Quarterly report on Public Debt Management is provisional.

(b):  The  details  of  gross  liabilities/debt  of  the  Government  including  investment  in  Special Securities  of  States  under  NSSF,  liabilities  on  account  of  Extra  Budgetary  Resources,  external debt valued at current exchange rate (as on 31st March of the respective financial year) and after adjusting  year-end  cash  balances,  during  last  four  years  and  the  current  years  estimates  are  as under:

| Financial Year   | Government's total liabilities   | Government's total liabilities   |
|------------------|----------------------------------|----------------------------------|
|                  | (Rs. in lakh crore)              | (% of GDP)                       |
| 2018-19          | 92.50                            | 49.0%                            |
| 2019-20          | 105.23                           | 52.4%                            |
| 2020-21          | 122.05                           | 61.6%                            |
| 2021-22(Prov.)   | 138.88                           | 58.7%                            |
| 2022-23(BE)      | 155.33                           | 60.2%                            |

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

In FY 2020-21, the Central Government debt increased by more than 9 percentage points of GDP in  a  single  year  mainly  on  account  of  COVID-19  global  pandemic,  which  hugely  disrupted projections of Government's public finances, including contraction in  GDP/denominator. Notwithstanding pandemic-induced revenue shortfalls, the Union Government, with the objective of  saving  lives  and  livelihood,  provided  for  an  unprecedented  step-up  in  budgetary  allocations. This led to closure of last FY 2020-21 with fiscal deficit of 9.2% of GDP, up from 4.6% of GDP achieved in FY 2019-20.

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.

(c)  to  (e):  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, mobilisation of resources through 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 burden.

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