Page 93 - economic_survey_2021-2022

Fiscal Developments 67

2.40 Public debt portfolio exhibits low currency and interest rate risk owing to low reliance on
external borrowing and issuance of majority of securities at fixed coupon. Further, most of the
external borrowing are from official sources which are of long term and concessional in nature.
The roll over risk is also low owing to low issuance of short-term bonds with a view to elongate
the maturity profile. 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 Government has increased from 9.7 years at end March 2010 to 11.31 years at the
end March 2021, thus reducing the rollover risk (Figure 19).

Figure 19: Maturity Profile of Outstanding Dated Central Government Securities

40.0
35.0
30.0
Per cent of total 20.0 30.9 35.0 19.2
25.0

15.0
10.0 29.3 29.0 22.9 22.5
5.0 11.2
0.0
0 to 5 years 5-10 years 10-20 years 20 years and
above
2012-13 2020-21 (P)

Source: Status Paper on Government Debt; Quarterly Report on
Public Debt Management;
Note: P: Provisional

2.41 Public debt is largely owned by institutional segments like banks, insurance companies,
provident funds etc. The share of commercial banks stood at 37.77 per cent at end-March 2021,
lower than 40.4 per cent at end-March 2020. Share of insurance companies and provident funds
at end-March 2021 stood at 25.3 per cent and 4.44 per cent, respectively. Share of mutual funds
increased from 1.4 per cent at end-March 2020 to 2.94 per cent at end-March 2021. Share
of RBI went up to 16.2 per cent at end March-2021 from 15.1 per cent at end-March 2020.
Issuance of dated securities is planned and conducted, keeping in view the debt management
objective of keeping the cost of debt low, while assuming prudent levels of risk and promoting
market development. All these factors make the public debt portfolio stable and also sustainable.
2.42 A vibrant secondary market provides opportunity to the investors to balance their portfolio
as desired. Availability of government securities upto 40 years provides a wide choice to the
investors. Trading though currently concentrated in few securities, is showing signs of more
even spread. Moreover, the recently launched Retail Direct Scheme by RBI will be instrumental
in channelizing the savings of middle class, small businessmen and senior citizens directly into
risk free government securities. With an objective to facilitate efficient direct access of retail
individual investor to the G-Sec market, which was earlier directly being accessed only by
large institutional investors, this scheme will give a boost to financial inclusion and broaden the
investor base.