Govt's public debt rose to over Rs 40 lakh crore

The government's total public debt in the October-December period in this financial year grew by 3.6 per cent to Rs 40,48,219 crore from Rs 39,06,828 crore in the previous quarter.

"This represented a quarter-on-quarter increase of 3.6 per cent (provisional) compared with an increase of 3.8 per cent in the previous quarter (Q2 of FY13)," the Quarterly

Report on Debt Management released by the Finance Ministry said. The total debt excludes liabilities that are not classified under public debt.

Internal debt constituted 90.7 per cent of public debt, compared with 90.5 per cent at the end of the September quarter.

The outstanding internal debt at Rs 36,69,823 crore constituted 36.1 per cent of GDP compared with 34.8 per cent at September 2012 end.

The report further said the liquidity conditions in the economy remained tight during the quarter with the liquidity deficit. The RBI reduced CRR by 25 basis points, effective November 3, 2012 and purchased securities worth Rs 39,057 crore through OMO auctions during the quarter.

The net amount provided under Liquidity Adjustment Facility (LAF) operations increased almost consistently during the quarter, it added.

The cash position of the government during third quarter was comfortable and remained in positive territory for the entire quarter, the report said, adding the issuances of treasury bills were reduced during the quarter in view of the cash position.

On slowdown in net inflows from foreign investment during October-November, the report said that the decline was mainly on account of FDI as gross investment into India showed lower inflow while outbound investment increased.

Gross tax collections during April-November at 50.5 per cent of budget estimate (BE) were marginally lower than 50.7 per cent a year ago.

The report revealed that non-tax revenue at 46.3 per cent of Budget Estimates was lower than 57.7 per cent in the same period of the previous year.

The debt report said that total expenditure showed containment as per cent of BE at 58.2 per cent during April-November 2012-13 as compared with 60.5 per cent during the corresponding period of the previous year.

Expenditure reduction in terms of percentage to BE was seen under both categories -- revenue and capital.

"As a result of expenditure containment outweighing the revenue shortfall, revenue deficit and fiscal deficit during April-November 2012 at 91.2 per cent and 80.4 per cent of BE were lower than 91.3 per cent and 85.6 per cent, respectively, during the same period a year ago," it added.

Slowdown in net capital inflows coupled with pressure in trade account balance strained the exchange rate leading to depreciation of Rupee from 52.7 (per USD) at end-September 2012 to 54.5 at end-November 2012. Pressure on Rupee continued in December and it closed at 54.8 at end-December 2012.

In the third quarter, the government issued dated securities worth Rs 1.55 lakh crore taking the borrowings during April-December 2012 to Rs 5.1 lakh crore constituting 89.5 per cent of Budget Estimates for the fiscal.