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Fiscal Developments 65

Central Government Debt

2.37 During the year, a major challenge in the aftermath of COVID-19 pandemic was the
management of debt, both for the Central and State Governments. In this milieu, conventional
and unconventional measures were taken in order to maintain the orderly market conditions to
ensure that the increased financial needs of the Governments are met smoothly, while keeping
in mind the major objectives of cost minimization, risk mitigation and market development.
Supported by these measures, the weighted average cost of the Government on dated securities
during 2020-21 was at 17-year low of 5.79 per cent, despite a 141.2 per cent jump in net market
borrowings (Figure 17).

Figure 17: Weighted average interest rate on Central Government Securities (Per cent)

12.0

11.0

10.0
9.0

8.0

7.0

6.0

5.0
4.0
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

Source: RBI
2.38 Total liabilities of the Central Government include debt contracted against the
Consolidated Fund of India, technically defined as Public Debt, as well as liabilities in the
Public Account. These liabilities include external debt (end-of-the financial year) at current
exchange rate but exclude part of NSSF liabilities to the extent of States’ borrowings
from the NSSF and investments in public agencies out of the NSSF, which do not finance
Central Government deficit. Central Government’s total outstanding liabilities were at
`117.04 lakh crore at end-March 2021. Public Debt accounted for 89.9 per cent of total
liabilities, while Public Account Liabilities, which include National Small Savings Fund, State
Provident Funds, Reserve Funds and Deposits and other Accounts, constituted the remaining
10.1 per cent. A brief description of the major components of total liabilities of the Central
Government may be seen at Table 6.