Page 449 - ES 2020-21_Volume-1-2 [28-01-21]

76 Economic Survey 2020-21 Volume 2

2.42 Central government debt is characterised by low currency and interest rate risks. This is
owing to low share of external debt in the debt portfolio and almost entire external borrowings
being from official sources. Further, most of the public debt has been contracted at fixed interest
rate making India’s debt stock virtually insulated from interest rate volatility. This lends certainty
and stability to budget in terms of interest payments.

2.43 The other salient feature is the gradual elongation of the maturity profile of the Central
government’s debt (refer to Figure 15) leading to reduced rollover risks. The proportion of
dated securities maturing in less than five years has seen consistent decline in recent years. The
weighted average maturity of outstanding stock of dated securities of the GOI has increased
from 9.7 years at end March 2010 to 10.7 years at end March 2020.

Figure 15: Maturity Profile of Outstanding Dated Central
Government Securities (as per cent of Total)

40

35
30
Per cent of total 20 30.9 29.0 35.0 30.0 24.1
25

15

10 22.9 16.9
5 11.2
0
0 to 5 years 5-10 years 10-20 years 20 years and above
2012-13 2019-20 (P)
Source: Status Paper on Government Debt; Quarterly Report on Public Debt Management; P: Provisional

State Finances

2.44 The States had budgeted for a consolidated gross fiscal deficit of 2.8 per cent of
GDP in 2020-21 BE. The average Gross Fiscal Deficit Budget Estimate for states that
presented their budgets before the outbreak of COVID-19 was 2.4 per cent of GSDP, while
the average for budgets presented post-lockdown was 4.6 per cent of GSDP (RBI Study on
State Finances). Figure 16 depicts the trend of fiscal consolidation for the combined States
in the last 3 years, with an average Gross Fiscal Deficit of 2.46 per cent of GDP. The Gross
Fiscal Deficit for States is however expected to shoot up relative to the pegged Budget
estimate during 2020-21.
2.45 As per 2020-21 Budget Estimates of the State Governments, the States’ combined own
Tax revenue and own Non-Tax revenue were anticipated to grow at 11.8 per cent and 12.1
per cent respectively over 2019-20 RE, higher than the growth displayed in 2019-20 RE.
On the expenditure side, revenue expenditure and capital expenditure in 2020-21 BE were
envisaged to grow at 8.2 per cent and 11.8 per cent respectively over 2019-20 RE (refer to
Table 12).