>[!Summary]- Table of Contents - G-Secs (Primary Market) > - [[G-Secs-Primary Market|Primary Market]] > - [[#History of Reforms]] > - [[#Types of Securities]] > - [[#Debt Management]] > - [[#FPI investments in G-Secs]] > - [[#Few important metrics used in analyzing the debt]] > - [[#Drivers of long-term (10 year) G-sec yields]] > - [[#Outstanding Liabilities]] > - [[#Outstanding stock of debt]] > - [[#Fiscal-Monetary Co-ordination in India - An Assessment 2013]] > - [[#Secondary Market]] > - [[#Data Releases]] > - [[#FAQs]] > - [[#Related]] > - [[#References]] ## Primary Market ^f1e0a4 1. This note covers central government securities, which are Dated G-Secs, T-Bills, and CMBs, and state government bonds ([State Development Loans](State%20Development%20Loans.md)-SDLs) 2. [Government security](RBI_Annual_200703_%20Manual%20on%20Financial%20and%20Banking%20Statistics%20-%20March%202007_VII.%20Statistics%20on%20Government%20Securities%20Market.pdf) means a security created and issued by the Government for the purpose of raising a public loan or for any other purpose as may be notified by the Government in the Official Gazette and having one of the forms mentioned in The Public Debt Act, 1944. 3. In September 1994, the government of India and RBI entered into formal agreement to end in a phase-wise manner the automatic monetisation of budget deficit through issuance of ad-hoc T-bills, and so the govt. started to finance its deficit outside the RBI at market-related rates of interest. 1. Related Note - [Treasury Bills (T-Bills)](Treasury%20Bills%20(T-Bills).md) 4. On April 1, 1997, *automatic monetisation of fiscal deficit* came to an end in 1997 after RBI discontinued practice of issuing ad hoc Treasury bills (T-bills). This accommodation had actually led to increase in the short-term debt of the govt. 5. The SLR was also reduced to the then prevailing floor of 25% of NDTL in October 1997 and, thereafter, continued to be reduced gradually. Also, this floor of 25% and cap of 40% was [removed](https://thc.nic.in/Central%20Governmental%20Ordinances/2007/2007.01.pdf) in 2007 after the amendment to the Banking Regulation Act of 1949. 6. *RBI's withdrawal from primary market:* 1. Consequent to the enactment of the Fiscal Responsibility and Budget Management (FRBM) Act, 2003, RBI’s discontinued direct purchases of G-Secs from the primary market in 2006, which in a way, facilitated the emergence of OMOs as a key tool for liquidity [management](https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=21536#FN5). 2. <span style="background-color:#ffffcc;">With the end of the issuances of ad hoc T-Bills in 1997 and RBI’s participation in the primary market for government debt in 2006, the yields on government bonds became truly market determined.</span> 3. August 30, 2006 - the [Government Securities Act, 2006](https://www.rbi.org.in/commonman/english/Scripts/FAQs.aspx?Id=380) was passed by the parliament, and it replaced the Public Debt Act, 1944. 4. The [Government Securities Regulations](https://www.rbi.org.in/commonman/english/Scripts/FAQs.aspx?Id=380), 2007 was framed to carry out the purposes of the G S Act. 5. Both came into force from December 1, 2007, they empower RBI for the issue and management of government securities 7. T-bills have also widened the money market. 8. The G-Sec market in India has reasonably been able to meet the growing funding requirement (consequence of high economic growth) of the Government, ==owing to strong primary, secondary and clearing and settlement systems.== 9. Though the liquidity in secondary market has increased with the growth in the economy, size of the market, widening of institutional investor-base, etc, ==there has also been a fragmentation of the liquidity.== 1. This is because the number of outstanding securities has remained high, viz. 92 GoI dated securities as of Jan 2012 and [112](https://rbi.org.in/Scripts/bs_viewcontent.aspx?Id=1956) as of Nov 25, 2024, despite *passive consolidation through re-issuance* of G-Sec. 3. As the govt. and the RBI try to elongate the maturity profile of outstanding debt, and manage the redemption pressures and minimize rollover risk, there has been a [lack of primary issuances](https://rbi.org.in/scripts/PublicationReportDetails.aspx?ID=677#f2:~:text=While%20the%20market,below%205%20years.) in the short-end of the yield curve, i.e. tenors below 5 years. 10. ==Banks are the largest buyers of G-secs due to SLR requirements.== 11. Tax for residents - There is no TDS like bank FDs and so one pays taxes on the interest income based on the income tax slab at end of the financial year. 12. ==In summary, the market instruments which are employed for cash management by Govt. include CMBs, treasury bills, scheduling of borrowings through dated securities and buyback/switch of debt. == 13. The Reserve Bank’s WMA/OD facility is used to meet residual temporary mismatches in receipts and expenditures. ### History of Reforms 1. A brief description of [major reforms in G-Secs market between 1992 and 2004](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=178). [^9] 2. May 31, 2007 - [Government Securities Market](https://rbi.org.in/scripts/PublicationReportDetails.aspx?ID=503) ### Types of Securities: 1. Names/types of securities 1. The [General Notification on Sale and Issue of Government of India Securities (including Treasury Bills and Cash Management Bills)](https://rbidocs.rbi.org.in/rdocs/content/pdfs/GOI26032025_1.pdf) dated March 26, 2025, issued by the MINISTRY OF FINANCE (Department of Economic Affairs) (BUDGET DIVISION) also gives details about different types of securities which the government can issue. An example is the [Page 7](https://rbidocs.rbi.org.in/rdocs/content/pdfs/GOI26032025.pdf). 2. It can also be found on this page [Government Securities Market in India – A Primer](https://rbi.org.in/commonman/english/Scripts/speeches.aspx?Id=3150). 3. [Status Paper](https://dea.gov.in/reports-public-debt-management) on the Government Debt, available on the Ministry of Finance’s website has the details of the outstanding stock of dated G-Secs. 4. [Public Debt Management](https://dea.gov.in/reports-public-debt-management), Quarterly Report, by DEA, Ministry of Finance, Govt. of India 2. Other than the benchmark bonds, ==to meet the diverse funding and hedging needs of the participants==, a wide array of instruments and products which would also offer benefits of portfolio diversification like zero-coupon bonds, floating rate bonds, Separate Trading of Registered Interest and Principal of Securities (STRIPs), bonds with call and put options, cash management bills, inflation indexed bonds, etc., have been issued. 3. **Dated G-Secs** *(Long-Term)* 1. Fixed Rate Bonds - Central government issue dated securities for 2-40 years, whereas T-bills are issued for 91/182/384 days. 1. October 2015 - Government of India security of 40 year maturity was issued for the first time 2. Special Securities 1. There are some "Special Securities" like those issued to entities like Oil Marketing Companies, Fertilizer Companies, the Food Corporation of India, etc. (popularly called oil bonds, fertiliser bonds and food bonds respectively) as compensation to these companies in lieu of cash subsidies. Government of India has also issued Bank Recapitalisation Bonds to specific Public Sector Banks in 2018. 2. They are non-transferable and are not eligible investment in pursuance of any statutory provisions or directions applicable to investing banks. These securities can be held under HTM portfolio without any limit. 3. Floating Rate Bonds: 1. They were first issued in September 1995, to help bond investors hedge interest rate risk by offering returns linked to short-term yields. 2. They are being issued on auction basis since November 2001. 4. Sovereign Green Bonds 1. In January 2023, Sovereign green bonds were introduced. 2. In the fiscal budget of FY22-23, the finance minister _announced_ India's plan to issue [sovereign green bonds](https://dea.gov.in/sites/default/files/Framework%20for%20Sovereign%20Green%20Bonds.pdf) to finance public sector measures to reduce carbon intensity. 3. [India’s Sovereign Green Bonds in RBI's Annual Report-2023](RBI_Annual%20Report_2023.pdf#page=200&selection=178,0,178,29) 4. [Nov 07, 2024](RBI_Notification_20241107_Fully%20Accessible%20Route%20for%20Investment%20by%20Non-residents%20in%20Government%20Securities%20–%20Inclusion%20of%20Sovereign%20Green%20Bonds.pdf) - Sovereign Green Bonds of 10-year tenor issued by the Government in the second half of the fiscal year 2024-25 were designated as ‘specified securities’ (included) under the FAR for 5. Sovereign Gold Bonds (SGBs) 1. [October 30, 2015](https://rbidocs.rbi.org.in/rdocs/content/pdfs/GB301015F_GC.pdf)- <span style="background-color:#FFF2D7;">Sovereign Gold Bond Scheme</span> was first announced, by DEA, Ministry of Finance, Govt. of India to reduce imports of physical gold for investment purposes as gold imports formed a good share of imports and thus was a drag on rupee.  2. *Related Note* - [Non-Monetary Gold and the RBI](Non-Monetary%20Gold%20and%20the%20RBI.md) 6. _Zero_-_coupon bonds_ (ZCBs) *(discontinued from the primary auctions)* 1. They were introduced on 17 January 1994, and were last issued in 1996 by the centre. 2. [Box III - Zero Coupon Bonds](RBI_Annual%20Report_1994.pdf#page=68&selection=0,0,12,5) in India in RBI's Annual Report 1994 7. Only for individual investors *(and are not traded in secondary market)* 1. [Savings (Taxable) Bonds](https://rbidocs.rbi.org.in/rdocs/content/pdfs/STB04012018_A1.pdf), 2018 2. [Floating Rate Savings Bonds (FRSB), 2020](https://rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=13365) -  it is a 7-year, taxable, non-transferable bond offer a **floating** rate that resets every six months, of National Savings Certificate (NSC) rate + 0.35% spread. 4. **Treasury Bills (T-Bills)** *(Short-term)* 1. This is a note on [[Treasury Bills (T-Bills)|T-bills]]. 5. **Cash Management Bills (CMBs)** *(Short-term)* ^f52884 1. [Aug 10, 2009](RBI_Press%20Release_20090810_Issuance%20of%20Government%20of%20India%20Cash%20Management%20Bills.pdf) - The GoI in consultation with RBI, announced this new short-term instrument to meet the ==temporary mismatches in the cash flow== of the Government of India. ^a5a69b 2. In May 2010, the first [auction](https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=21168) was conducted. The non-competitive bidding scheme is not available for CMBs. 3. CMBs have the generic character of T-bills but are issued for maturities less than 91 days. 4. Both cash management bills and treasury bills are basically meant for short-term capital mismatches. 5. During second half of 2013 (July/August/September 2013), the Reserve Bank of India used cash management bills (CMBs) as a measure to contain the volatility in the foreign exchange market. The issuances were aimed at draining out liquidity in the short-end of the market spectrum. These measures helped in keeping the money market conditions tight, with money market rates rising to around the MSF rate (that is 300 bps higher than the repo rate) 6. ==They can also used as a liquidity management tool (but not under OMOs in dated G-Secs to adjust liquidity on durable basis) but to adjust the rupee liquidity conditions in the market but not on durable basis but rather transient/frictional basis.== 1. In [2016](https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=38769), they were issued under the [[Market Stabilisation Scheme (MSS), 2004|MSS]] scheme. 2. In [2013](RBI_Press%20Release_20130808_RBI’s%20further%20measures%20to%20address%20volatility%20in%20Forex%20Market-%20To%20auction%20`%2022,000%20crore%20GoI%20Cash%20Management%20Bills%20Every%20Monday.pdf), they were issued to absorb liquidity amid volatility in the forex market. 7. As long as there is scope of borrowing under the [[Ways and Means (WMA)|Ways and Means Advances (WMA)]], resort to Cash Management Bills (CMBs) is usually not being undertaken by the government 8. Treasury bills have structured tenors, while CMBs are very short notice for issue. 9. They are permitted [SLR (Statutory Liquidity Ratio)](SLR%20-%20Statutory%20Liquidity%20Ratio.md) securities. 6. [STRIPS](STRIPS.md) (Separate Trading of Registered Interest and Principal of Securities) - they are not issued in the primary auction, but traded in the secondary market. 1. [June 12, 2025](RBI_Notification_20250612_Stripping:Reconstitution%20in%20State%20Government%20Securities.pdf) - RBI introduced STRIPS for state government bonds called SDLs. 7. **State governments** 1. They issue only state development loans ([SDLs](https://www.edelweissmf.com/Files/Insigths/viewpoint/Primer_on_SDLs_08022023_120316_PM.pdf)), for period of 2-25 years, but mostly for 10 years as it helps them to [price](https://www.rbi.org.in/scripts/PublicationsView.aspx?id=13553) it favorably over the most liquid dated G-secs, viz. 10Y G-Sec. 1. As on Nov-06, the value of the total outstanding SLDs (ex. power loans) was Rs 2,39,805 crore. 2. As of Nov-24, it is Rs 58,33,167 crore. 3. As on Oct-24, here is a list of [outstanding stock](https://www.ccilindia.com/documents/d/ccil/Outstanding_Government_Debt%20Rakshitra-pdf) of debt of central and state government. 2. UDAY Bonds - Issued by state governments (from 2015 onward), typically long-term (10–15 years), high-coupon bonds used to raise funds from investors to repay DISCOM debt, with states effectively taking over the liabilities and paying interest to bondholders. 8. By coupon structure: 1. Fixed Rate Bonds 2. [Floating Rate Bonds](RBI_Annual%20Report_2006.pdf#page=196&selection=80,0,81,19) (coupon resets) 3. Zero Coupon Bonds (traded as STRIPS in the secondary market, but not issued by the central govt. in primary auctions) ### Auction Process 1. **Auction Platform** 1. On June 3, 1992, post the initiation of economic reforms, the government borrowing programme (dated G-Secs) was conducted through auctions (yield-based) for the first time. This marked the shift towards market-based pricing of G-secs. ^8c08d5 2. As auction-based yields were higher, an increasing part of the government borrowings came to be financed through market sources, enabling a better control of reserve money by the Reserve Bank. 3. On May 11, 1999, the **first price-based auction** of dated G-Secs was conducted. 4. Prior to auctions as the method of issuance, the interest rates were ==administratively fixed by the Government, and now they are fixed through a (yield or price based) auction system, which facilitates a market-based price discovery process. 5. Since October 2012, these primary market auctions have been conducted on RBI’s e-Kuber electronic platform. 6. From October 2012, G-Secs are auctioned on RBI's [e-kuber](https://www.rbi.org.in/commonperson/English/Scripts/FAQs.aspx?Id=711#:~:text=3.%20How%20are%20the%20G%2DSecs%20issued%3F). It is the Core Banking Solution (CBS) platform of RBI. 7. From July 2021, auctions were uniform-price based (but not maturities 30 years and more), viz. sold at a cut-off level. 1. Before, bidders tried for the lowest bid and pushed prices lower in absence of strong demand for the paper. 2. Also, the reward for the lowest bid was also enjoyed by the bidders bidding at higher price. 8. ==From [April 1, 2024](https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=57603), auctions are multiple-price based, viz. sold at different prices bid by buyers above the cut-off level. == 1. Here there is a reward for the bidder for the efforts to discover a price. So many participants demanded this. 2. It is to be noted that the new securities are sold by yield-based auction and re-issue securities by price-based auction. 9. Buybacks are through reverse auction, viz. the sellers bid for the lowest price to sell their securities. 10. ==A detailed note on [[Primary Dealers (PDs)|Primary Dealer (PDs)]] System was initiated in 1996.== 11. **Treasury Bills** ^776078 1. The Ministry of Finance, Department of Economic Affairs, Budget Division, issues the terms of sale and Issue of Government of India Securities (including Treasury Bills and Cash Management Bills) like [here](https://rbidocs.rbi.org.in/rdocs/content/pdfs/GOI26032025.pdf). 2. **[[Treasury Bills (T-Bills)|T-Bills]]:** Auctions of 182-day treasury bills was introduced from November 1986, 364-day treasury bills from April 1992, and 91-day treasury bills from January 1993. On 6 June 1997, RBI conducted first auction of 14 day Treasury Bills and in October, auction of 28 day Treasury Bills was introduced. 3. Results are declared same day like [here](https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=60229). 4. Treasury Bills Outstanding can be checked in [WSS](https://m.rbi.org.in/scripts/BS_viewWss.aspx) 5. They do not pay interest. They are issued at discount and redeemed at face value on the day of maturity.  Yields on T-Bills act as “short-term benchmarks” for floating rate products like Floating Rate Bonds (FRBs). 6. Yields (in %) are calculated as: = $\displaystyle{\left( \frac{100 - P}{P} \right) \times \frac{365}{T} \times 100}$, where P is the price and T is the tenure in days, and day-count is (Actual/365). 1. From auction dated October 27, 2004, the convention for implicit yield at cut-off price for treasury bills was changed from actual/364 day count to actual/365 day count. 2. convention and now the yield calculation is done on the basis of 1 year = 365 day 7. RBI may also ==reject any or all bids either wholly or partially==, without assigning any reason thereof, if the govt. has enough cash or the yields are higher than expected, like on [(March 29, 2023)](https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=55431), which could be due to the conditions like year-end liquidity constraints or liquidity deficit in system. In the latter case, yield is also not disclosed in the result. It is just estimation. 8. Up to 5% can also be allocated to retail investors, based on the [non-competitive scheme](https://rbi.org.in/scripts/FAQView.aspx?Id=49), where allotment is done at the weighted average yield of all the allotments to the competitive bidders. So no price/yield is mentioned in the bid. 1. In case of T-bills, non-competitive scheme is available to all other than commercial banks and co-operatives. So it is open to State Governments, Union Territories with legislature, eligible Provident Funds in India, designated Foreign Central Banks, firms, companies, corporate bodies, institutions, and trusts. 9. RBI does not extend any rediscounting facility to such bills now, and also they are not bought back before maturity. 10. ==T-bills are issued by the RBI through the price-based auction using multiple price method.== 1. Under this method, all bids equal to or above the cut-off price are accepted and alloted to the bidder at the price quoted by him, and  and apparently the issuer collects a premium from all bidders quoting price than the cut-off price/quoting yield lower than cut-off yield. This is the problem of 'winners curse', that is overpaying relative to everyone else.. 2. As more govt. can sell bonds at a low yield and collect premium from the bidders with quotes lower than the cut -off yield, it can be more cost effective. 3. But it may lead to low revenues as bidders tend to shade (bid low) their bid price to avoid the winners curse. 11. Who can participate in the auctions of G-Secs in the primary market? 1. The Auction happens through ‘Competitive bidding’ and ‘Non-competitive bidding’ processes. 2. **Participants** 1. Institutional Investors/Competitive bidding 1. Commercial banks, Primary Dealers, scheduled UCBs, insurance companies and provident funds, who maintain funds account/current account and securities accounts (Subsidiary General Ledger (SGL) account) with RBI, are members of this electronic platform. 2. All members of E-Kuber can place their bids in the auction through this electronic platform. 3. Scheduled commercial banks or PDs are called Primary Members (PMs). 4. Non E-Kuber members - including non-scheduled UCBs can participate in the primary auction through Primary Members-PMs. They open a Gilt Account with a PM (bank/PD). The PM maintains a CSGL account with RBI (PDO) for these clients/constituents called Gilt Account holders (GAH). Here, RBI credits G-Secs to PM’s CSGL account and then PM credits those G-Secs to GAH’s Gilt Account or demat account. 2. Retail Investors/Non-competitive bidding 1. Non-Competitive Bidding (NCB) Facility: 1. It was introduced on [December 7, 2001](https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=522&Mode=0) for dated central G-Secs, in 2005 for SDLs (based upon the recommendations of the Working Group on Liquidity of State Government Securities, Chairman–Shri. V.K.Sharma, 2005), and on [July 28, 2016](https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=37628) for T-Bills. 2. Retail investors can also participate in the primary auctions for Dated Government Securities and Treasury Bills auctions through the facility of non-competitive bidding. Here a Retail investor is any person including individuals, firms, companies, corporate bodies, institutions, provident funds, trusts and any other entity as prescribed by RBI. 3. This is a group which does not have not a current account or a direct SGL account with RBI. 4. [FAQs on Non-competitive Bidding Facility for Dated Securities and Treasury Bills of the Government of India](https://rbi.org.in/scripts/FAQView.aspx?Id=49) 5. Here the investor does not participate directly but has to necessarily come through an aggregator or facilitator (like scheduled banks or primary dealer (primary members of E-Kuber) or specified stock exchanges. 6. So RBI credits the securities to the CSGL account of the aggregator or facilitator, who in turn credit the securities to the gilt account or dematerialized account of the investors. 7. July 6, 2011 - RBI had extended the DvP - III facility to GAH 8. Stock Exchanges: On [November 23, 2017](https://rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=11175), even stock exchanges were permitted to act as aggregators/facilitators to submit bids in the non-competitive segment of primary auctions. 1. NSE: 1. [NSE](https://www.nseindia.com/static/products-services/non-competitive-bidding-e-gsec) also acts as facilitator in NCB 2. November 16, 2018 - [NSE](https://www.nseindia.com/products-services/about-non-competitive-bidding) had introduced the NSE goBID online platform to allow retail investors to invest in fresh or re-issuances of G-secs (primary market) and T-bills through the non-competitive bidding mechanism. 3. November 15, 2019 - SDLs were added to this facility. 4. To encourage retail investors in these instruments, the facility of [non-competitive bidding (NCB)](https://rbi.org.in/scripts/FAQView.aspx?Id=49) has been introduced. It is done by facilitator (like [NSE](https://www.nseindia.com/products-services/about-non-competitive-bidding)) or an aggregator (CCIL). 5. Under the scheme, eligible retail investors (non-competitive bidders) apply for a certain amount of securities in an ==auction without mentioning price/yield, and are allotted securities at the weighted average price/yield of all the allotments to competitive bidders in the auction. 2. BSE 1. [April 24, 2018](https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20180423-42) - BSE launched [NCB](https://www.bseindia.com/downloads1/Non_Competitive_Bidding_in_G_Sec_TBills.pdf) facility with effect from April 24, 2018. It collected bids on iBBS (Internet-based Book Building System). 2. November 30, 2018 - BSE announced the launch 'BSE-Direct' for retail investors in non-competitive bidding of G-sec and T-bills w.e.f from December 03, 2018. 3. February 1, 2019 - A mobile app version of 'BSE-Direct' was launched. 2. **Direct Retail Participation in Primary Market** *since 2021* ^cf69e1 1. NDS-OM Retail: *(Primary & Secondary both)* 1. [Feb 5, 2021](RBI_MPS_SDRP_20210205.pdf) - RBI announced the 'RBI Retail Direct’ facility. 2. [Nov 12, 2021](RBI_Press%20Release_20211112_RBI%20Retail%20Direct%20Scheme.pdf) - The scheme was made effective, and Retail investors could directly bid/buy in the primary auction (and buy/sell in secondary market) through the [Retail Direct](https://www.rbi.org.in/commonman/english/Scripts/FAQs.aspx?Id=3337) scheme. 1. The orders are placed on the trading platform RBI NDS-OM RETAIL. It is done done by opening a _Retail Direct Gilt (RDG) Account_ with RBI through its online [portal](https://www.rbiretaildirect.in/auth/login). 2. So Retail Direct users can place non-competitive bids in primary auctions (for new G-Secs, T-Bills, SDLs, SGBs) and buy/sell orders in the secondary market via NDS-OM Retail from the unified portal. 1. CCIL collects (as an aggregator) all the bids received in the primary auction on this platform, which gets submitted to the RBI as one single bid under the non-competitive segment. So the price is weighted average price of the bids accepted in the competitive bidding, and the allotment is done on pr-rata basis, if total bids exceed the reserved amount. Then RBI allots the bids under the non-competitive segment by crediting securities (only) in SGL form in the SGL account of the aggregator or facilitator which, in turn, allocates it to the bidders by credit the securities into the gilt account or dematerialized account of the investors. 3. They open Retail Direct Gilt Account (RDGA) 4. [Jan 4, 2022](RBI_Notification_20220104_Retail%20Direct%20Scheme%20–%20Market%20Making.pdf) - RBI asked PDs to provide buy/sell quotes to RDGAH in the odd-lot segment for liquid securities and on RFQ segment, for Retail Direct GAH. 5. May, 2022 - ==[Box VII.1 RBI Retail Direct Scheme](RBI_Annual%20Report_2022.pdf#page=183&selection=5,0,5,24) in RBI's Annual Report of 2022== 6. [Aug 6, 2025](RBI_MPS_SDRP_20250806.pdf) - RBI announced the introduction of auto-bidding (and thus Systematic Investment Plan (SIP)) facility in the portal, allowing retail investors to fully automate their regular participation in 91-day, 182-day, and 364-day T-Bill auctions. 7. [Oct 23, 2024](RBI_Press%20Release_20231023_Subscription%20to%20Floating%20Rate%20Savings%20Bonds,%202020%20(Taxable)%20through%20RBI%20Retail%20Direct%20Portal.pdf) - RBI Retail Direct account holders were given an option to buy Floating Rate Savings Bonds 8. But there remains considerable scope for improvement in ensuring liquidity for the retail investors throughout market hours on the NDS-OM platform. [^5] 9. RBI Retail Direct Scheme - [FAQs](https://www.rbi.org.in/commonman/english/scripts/FAQs.aspx?Id=3337) and [Statistics](https://rbiretaildirect.org.in/#/about_statistics) 10. *Related* - Retail Participation in Government Securities Market - A Potential Game Changer for Vision Viksit Bharat, by Vardhana Pawaskar and Payal Ghose (CCIL) [^8] 11. ==[RBI Retail Direct Scheme in RBI's Annual Report of 2022](RBI_Annual%20Report_2022.pdf#page=183&selection=5,0,5,24)== 3. **Issuance Calendar** ^776079 1. Central Govt - The Reserve Bank, in consultation with the Government of India (GoI), issues an indicative *half-yearly auction calendar* through a press release for Central government dated securities (CGS) in end-March and end-September for the auctions to be held in the first and second halves of the financial year, and quarterly for T-bills, providing details relating to the amount of borrowing, the tenor of security and the likely period during which auctions are to be held. 1. Example: [Issuance Calendar for Marketable Dated Securities for October 2025 - March 2026](https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=61300) 2. search keyword - calendar 2. Treasury Bills - By the end of the quarter, RBI releases auction calendar through a press release for the next quarter like (Q1FY26) [here](https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=60079). 3. State Govt. - State have an indicative [quarterly](https://www.rbi.org.in/commonman/english/Scripts/FAQs.aspx?Id=3337#:~:text=quarterly%20indicative%20calendars) calendar and the level of (gross) market borrowings in a particular year is decided by the Central government, in consultation with the State governments. 4. **Timings:** 1. Primary auctions are usually held on Wednesdays for Government of India Treasury Bills (T-Bills), Fridays for dated G-Secs, Tuesdays for State Development Loans (SDLs), and for Sovereign Gold Bonds (SGBs) as per RBI-announced weekly windows. 2. Competitive bids are placed between 10:30 am - 11:30 am, and 3. Non-Competitive bids between 10:30 am - 11:00 am. 5. **Clearing and settlement:** 1. In the **primary market**, when government securities are issued through auctions, the clearing and settlement is done by PDO, which is the central securities depository (CSD) for GoI securities.. The _securities leg_ (i.e., delivery of securities) after allotment is handled through PDO (Public Debt Office) while funds leg goes through RTGS. 2. Settlement is done on T+1 basis (i.e. securities and funds are exchanged on next working day, i.e. Monday, for dated G-Secs.) 1. The settlement of primary auctions (including coupon payments and redemptions) in the Government securities market takes place between 10:00 AM and 1:00 PM. 3. In the [[G-Secs-Secondary Market|secondary market]], for outright, repos (called Market Repos on CCIL which can be Basket or Special Repos) or tri-party repos in G-Secs, dealt on its systems, viz. NDS-OM, CROMS, TREPS respectively, or reported (OTC) to it by its members, CCIL (Clearing Corporation of India Ltd.) provides guaranteed clearing and settlement through its [robust process](https://www.ccilindia.com/web/ccil/tripartyclearingsettlement). 1. It acts as a central counterparty (CCP), that is becomes buyer to every seller and seller to every buyer, and ensures multilateral netting of positions. The settlement is through PDO for the securities leg, while funds leg goes through RTGS. 3. Related - [Auctions of Government Securities in India – An Analysis](RBI_Research_Occasional%20Papers_200908_RBI%20-%20Occasional%20Papers%20-%20Winter%202008.pdf#page=28&selection=3,0,4,11) in Reserve Bank of India Occasional Papers Vol. 29, No. 3, Winter 2008 >==[Box VII.1 RBI Retail Direct Scheme](RBI_Annual%20Report_2022.pdf#page=183&selection=5,0,5,24) in RBI's Annual Report of 2022== ### Debt Management 1. Department of Economic Affairs, Ministry of Finance, Govt. of India 1. The debt management function within the Ministry of Finance is primarily handled by the Department of Economic Affairs (DEA), Budget Division, specifically through its [Public Debt Management Cell (PDMC)](https://dea.gov.in/public-debt-management-cell). This cell was set up in [2016](GoI_Office%20Memorandum_20161004_Setting%20up%20a%20Public%20Debt%20Management%20Cell%20(PDMC)%20in%20Budget%20Division,%20Department%20of%20Economic%20Affairs,%20Ministry%20of%20Finance.pdf). 2. The sovereign external debt is managed (policy, monitoring, reporting) by the External Debt Management Unit (EDMU) under the Economic Division, Department of Economic Affairs (DEA), Ministry of Finance. 2. Internal Debt Management Department, RBI 1. The [main activity](https://www.rbi.org.in/commonman/english/scripts/Departments.aspx#INTERNAL:~:text=Top-,Internal%20Debt%20Management%20Department,-The%20main%20activities) of the [Internal Debt Management Department](https://rbi.org.in/scripts/PublicationsView.aspx?Id=11356) of the RBI is to manage the public debt of Government of India/ State Governments. 3. Independent Debt Management: 1. The issue of separate Public Debt Management Agency (PDMA), that is an Independent Debt Management Office, in India to separate debt management from monetary policy (currently with RBI) has been recommended by ==several committees: 1. [May 1997](RBI_Report_1997_Committee%20on%20Capital%20Account%20Convertibility%20(1997)_Chairman-S.S.Tarapore_Tarapore%20Committee-1.pdf) - Committee on Capital Account Convertibility (1997, chaired by S.S. Tarapore), RBI 2. Dec, 1997 - Working Group on Separation of Debt Management from Monetary Management (Chairman-V. Subrahmanyam), RBI (*mentioned in the Annual report of 2001*). 3. [September 2000](RBI_Group:Committee_200009_Report%20of%20The%20Advisory%20Group%20on%20Transparency%20in%20Monetary%20and%20Financial%20Policies_Chairman-Narasimham.pdf) - Advisory Group on Transparency in Monetary and Exchange Rate Policies (2000), RBI 4. 2001 - Internal Expert Group on the Need for a Middle Office for Public Debt Management (Arvind Virmani, 2001), Ministry of Finance 5. [Aug 28, 2001](https://rbi.org.in/Scripts/AnnualReportMainDisplay.aspx) - Annual report of 2000-01, RBI 6. [August, 2003](https://www.indiacode.nic.in/bitstream/123456789/2064/1/a2003-39.pdf) - FRBM Act, 2003 7. 2004 - Task Force on the Ministry of Finance for 21st Century (Chairman-Vijay Kelkar), Ministry of Finance 8. [July 16, 2004](GoI_Group-Committee_20040716_Report%20of%20Task%20Force%20on%20Implementation%20of%20the%20FRBM%20Act_Chairman-Vijay%20Kelkar.pdf) - Task Force on Implementation of the FRBM Act (Chairman-Vijay Kelkar), Ministry of Finance 9. [Sep 1, 2006](https://rbi.org.in/scripts/PublicationReportDetails.aspx?ID=468) - the Committee on Fuller Capital Account Convertibility (2006) 10. [Sep 12, 2008](RBI_Report:Committee_20080912_Committee%20on%20Financial%20Sector%20Reforms_2008_A%20Hundred%20Small%20Steps_Chairman-Raghuram%20Rajan.pdf) - High Level Committee on Financial Sector Reforms (2008), RBI 11. [October 2008](http://dea.gov.in/files/other_reports_documents/Report_Internal_Working_Group_on_Debt_Management.pdf) - Internal Working Group on Debt Management (Jahangir Aziz Report, October 2008), Ministry of Finance 12. [March 25, 2009](https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=10275) - Committee on Financial Sector Assessment (6 volumes) (Chairman-Rakesh Mohan), RBI 13. [2012](GoI_Group-Committee_2012_Report%20of%20the%20Working%20Group%20on%20Debt%20Management%20Office_FSLRC.pdf) - Report of the Working Group on Debt Management Office (Chairman-Govinda Rao), FSLRC 14. [Sep, 2012](https://dea.gov.in/files/other_reports_documents/Kelkar_Committee_Report.pdf) - Report of the Committee on Roadmap for Fiscal Consolidation (Chairman-Vijay Kelkar), Ministry of Finance 15. March, 2013 ([Vol-1](GoI_Group-Committee_201303_Report%20of%20the%20Financial%20Sector%20Legislative%20Reforms%20Commission_Vol-1.pdf) & [Vol-2](GoI_Group-Committee_201303_Report%20of%20the%20Financial%20Sector%20Legislative%20Reforms%20Commission_Vol-2.pdf)) - Financial Sector Legislative Reforms Commission (FSLRC) (Chairman: B.N. Srikrishna), 2013, Ministry of Finance 16. [Feb 28, 2015](https://www.indiabudget.gov.in/budget2015-2016/ub2015-16/fb/bill.pdf) - The Finance Bill, 2015, proposed to establish autonomous/independent Public Debt Management Agency (PDMA) but it was not implemented. 4. Here we discuss how RBI's debt management strategy. 5. The objective of the debt management strategy (DMS) is to secure the government’s funding at all times at low cost over the medium /long-term while avoiding excessive risk, and is restricted to active elements of domestic debt management, i.e., marketable debt of the Central Government. 6. It  revolves around three broad pillars: 1. Low cost. This can be divided as: 1. when to issue -  this includes appropriate issuance strategy based on market conditions, planned issuances and adopting a transparent practice of announcing these dates by way of a detailed issuance calendar. So here the overall aim is to maintain a transparency and predictability in borrowing plans. 2. what to issue - offer of appropriate instruments to lower cost in medium to long-run 3. whom to issue - developing financial markets, offer of appropriate mix of instruments meeting the preferences of various investor segments and thereby broadening the investor base 2. Risk mitigation (interest rate, foreign currency risk, rollover, creditor-concentration) and market development. 1. interest rate - In case of floating rate instruments, the interest rate risks are related to re-fixing. In India a variety of instruments have been issued, such as 1. Fixed Rate Conventional Bonds, 2. Linkers (floating rate instruments) 1. Floating Rate Bonds (FRBs) which offer National Savings Certificate (NSC) rate plus a spread of 35 basis points (0.35%) or rate linked to 182-day T-bills+spread, 2. Indexed bonds - capital Indexed Bonds (CIBs), Inflation Indexed Bonds (IIBs) 3. Zero Coupon Bonds But the contribution of linkers (FRBs, indexed bonds like CIBs, IIBs) has remained small, that is floating rate debt constitutes a small portion of marketable debt, thereby limiting interest rate risk in the debt portfolio. 2. Foreign currency risk - As on Dec-2026, India has not issued sovereign debt securities denominated in foreign currency. The external sovereign debt is in form of [[Forex Market Interventions and Sterilisation#^b264c4|bilateral and multilateral loans]] 1. Raising debt in foreign currency could be cost effective and provide a wide and varied investor base. 2. In a capital-scarce country like India, overseas sovereign bonds provide an additional source of savings. When FPIs buy these bonds, they bring in foreign currency, which the RBI converts into rupees for the government. This effectively relaxes domestic financing constraints. 3. But a country with large foreign currency denominated liabilities is, however, exposed to “currency/exchange rate risks” which could impact macro-economic stability. 4. Further, dependence on foreign currency debt could mean sharp volatility in interest rate and market volumes linked to the uncertainty of external events. 5. Thus participation of foreign investors in the domestic bond markets also needs to be examined in the light of our policy stance relating to calibrated approach to capital account convertibility and the possibility of interest rate and exchange rate volatility due to reversal of capital flows. 6. There was also a proposal for issuance of overseas sovereign bonds by former finance secretary Subhash Chandra Garg in 2018. 3. Rollover risk - It is contained by elongation of maturity through switches / buy back and establishing limits on security issuances and annual maturities. 3. Market Development 7. Due to global financial crisis, European sovereign debt crisis and related developments, there were increased volatility and uncertainty in the financial markets. Like other economies, India had also embarked on a program of fiscal stimulus to revitalise the economy resulting in accelerated borrowings. As a result, ==gross market borrowing of Government of India has increased by nearly 400 percent during the 7 years, that is from 2009 to 2015.== 8. During 2008-10, RBI did few things to successfully complete the large borrowing programmes: 1. It front loaded the borrowing, 2. De-sequestered [[Market Stabilisation Scheme (MSS), 2004#Impact on Government's Account|MSS]] balances ( that is allowed to be used for the government expenditure) and 3. shortened average maturity of issuances (but once the markets stabilized, RBI embarked on elongation of maturity). 9. Debt market is guided by many factors like: 1. monetary policy stance, 2. inflation, 3. political stability (prevalence of a stable government in India), 4. fiscal consolidation, 5. pickup in the private sector credit, 6. CRR, SLR and HTM, 7. the policy stance on foreign portfolio investment in G-sec, etc 1. FPIs widen and diversifying the investor base which improves demand for government bonds but the issues of financial instability arising from sudden-stop and reversal risks, like during the taper tantrum should also be considered. 8. current account deficit, 9. stability on currency front, 10. geo-political landscape in developed countries, 11. commodity prices like that of crude oil and gold, 12. state of the Euro Zone economy, US economy, China 10. Even after fiscal consolidation, the government is likely to continue running fiscal deficits (and hence the gross bond supply would remain elevated) in the foreseeable future because of: 1. accumulated debt stock that needs to be rolled over, 2. as also the country's growing GDP. 11. Why RBI does not allow international trading and settlements of Indian government bonds through global securities settlements systems like Euroclear? 1. There is a downside risks such as liquidity getting fragmented as some of the FPIs presently operating in India may like to move off-shore 2. The move would lead to the development of a parallel Government securities yield curve outside India, thereby creating yet another NDF-like market overseas with all the attendant issues. 3. Indian G-Secs are settled exclusively domestically through CCIL. 12. The aim of RBI here is to build a low risk portfolio at a low cost by elongating the maturity for reducing rollover risk, maintaining large benchmark issuances to foster liquidity, a low level of foreign currency debt and a large domestic investor base. 13. **Tenor of securities** 1. Borrowing strategy has been prepared in such a manner that the maturity profile is elongated to reduce redemption pressures in the near term. As a result, no market borrowing has been proposed in the 0-5 year time bucket. 2. The maturities range between 5-40 years. 3. In line with the strategy of elongating maturity, the proposed benchmark for weighted average maturity of the debt portfolio is 10 $\pm$ 2 years. 14. ==[3 Concepts](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=227#:~:text=to%20clarify%20the%20three%20concepts%20viz): Budget Deficit, the Monetised Deficit or the net RBI credit to the Government and RBI's support in primary issues of Central Government securities.== 15. **Must Read:** 1. RBI. (Dec 31, 2015). ==Debt Management Strategy for India (2015-18)==. [Link](https://rbi.org.in/scripts/PublicationReportDetails.aspx?UrlPage=&ID=837) 2. RBI. (2015, January 19). ==Changing Contours of Debt Management==. Address by Shri G Padmanabhan, Executive Director at the Annual Meet of Primary Dealers Association of India on January 17, 2015. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=936) 3. Reports of the Comptroller and Auditor General of India on Compliance of the Fiscal Responsibility and Budget Management Act, 2003 for a financial year. 4. Harun R Khan. Aug 12, 2014. ==Public Debt Management: Reflections on Strategy & Structure==. (Based on the keynote address delivered by Shri Harun R Khan, Deputy Governor, Reserve Bank of India at the 9th Annual International Conference on “Public Policy & Management: Debt Management” at Indian Institute of Management, Bangalore on August 11, 2014). [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=909) [^6] 5. [Public Debt Management: Reflections on Strategy & Structure](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=909) [^6] 6. IMF. (Mar, 2015). IMF’s Article IV Consultation Staff Report. 16. **Dr Duvvuri Subbarao in an interview with the WSJ**: 1. In an interview published in _The Wall Street Journal_ and conducted by Alex Frangos, Dr Duvvuri Subbarao, the then Governor of the Reserve Bank of India, spoke about the [[Duvvuri Subbarao - Interview with the WSJ (February 13, 2012)#Central Bank as a debt-manager to the govt.|role of the RBI as a debt manager to the govt. of India]] ### FPI investments in G-Secs 1. This is discussed [[Foreign Investment in India (Various Routes)#1.1 Debt (Rupee)- Four Routes|here]]. ### Few important metrics used in analyzing the debt: 1. Short-term debt. Short-term debt is defined as the debt maturing in next 12 months, and it is sum of 1. Dated securities maturing in next 12 months (including special Securities) 2. T-Bills outstanding during the year 3. It can be compared with the total stock of outstanding securities ([[G-Secs-Primary Market#Outstanding Liabilities|total marketable debt]]). 2. Weighted average coupon (%) of outstanding stocks 3. Ratio of interest payments (IP) to revenue receipts (IR) 4. Maturity Bucket 1. Less than 5 years 2. 5-9 years 3. 10-14 years 4. 15-19 years 5. 20 years and above 5. Maturity bucket in each year 1. G-Secs and special securities 6. Debt Sustainability Indicators 1. $\displaystyle\frac{\text{Debt}}{\text{GDP}}$ 2. Rate of growth of public debt (D) lt;$ growth of nominal GDP 3. Real rate of interest (r) lt;$ real output growth (g) [^4] 4. Effective interest rate (i) lt;$ Rate of growth of public debt (D) (that is govt. must try to achieve primary surpluses) Public debt dynamics start from the identity - $\displaystyle B_{t+1} = (1+i)B_t - PB_t$, where $\displaystyle B_t$ is the stock of public debt, $\displaystyle i$ is the effective interest rate, and $\displaystyle PB_t$ is the primary balance (PB, positive for surplus). The rate of growth of public debt is defined as $\displaystyle D = \frac{B_{t+1}-B_t}{B_t}$. Substituting for $\displaystyle B_{t+1}$, $\displaystyle D = \frac{(1+i)B_t - PB_t - B_t}{B_t}$. Simplifying, $\displaystyle D = i - \frac{PB_t}{B_t}$. The sustainability condition mentioned in this paper is $\displaystyle D < i$. Substituting for $D$, $\displaystyle i - \frac{PB_t}{B_t} < i$. This implies $\displaystyle \frac{PB_t}{B_t} > 0$, and since $\large B_t > 0$, it follows that $\displaystyle PB_t > 0$. Hence, the condition that rate of growth of public debt is lower than the interest rate is equivalent to saying that the government must run a primary surplus. 1. Weighted Average Time to Maturity (years) 2. $\displaystyle \frac{\text{Interest Payments}}{\text{GDP}}$ 3. $\displaystyle \frac{\text{Interest Payments}}{\text{Revenue Receipts}}$ 4. $\displaystyle\frac{\text{Interest Payments}}{\text{Revenue Expenditure}}$ 1. Revenue Deficit/Balance = Revenue receipts − Revenue expenditure 2. Primary revenue balance (PRB) = Revenue receipts − (Revenue expenditure − interest payments) 5. $\displaystyle\frac{\text{Debt}}{\text{Tax Revenue}}$ 6. $\displaystyle\frac{\text{Debt}}{\text{Revenue Receipts}}$ 7. Primary Balance 1. Primary Balance = Total Receipts (excluding borrowings) – (Total Expenditure - Interest Payments) 1. A Primary Deficit means borrowing is needed even after excluding interest payments. 2. A Primary Surplus means total receipts (without borrowings) sufficient for expenditures (without interest payments); borrowing may happen for only for debt related payments. 2. Fiscal Deficit (FD) = Total expenditure – Total receipts (excluding borrowings, so all revenue receipts + capital receipts which are not debt like disinvestments). So it gives the total required borrowings for the year. 3. Overall Balance/Budget Deficit = Total Receipts (including borrowings) − Total Expenditure = *Expected to be nil or surplus* 1. Ownership Pattern of GoI Dated Securities (% to total) to analyse creditor-concentration risk 1. This can be [found](https://data.rbi.org.in/BOE/OpenDocument/2409211840/OpenDocument/opendoc/openDocument.jsp?logonSuccessful=true&shareId=0) in the *Database of Indian Economy, Reserve Bank of India > Publication > Time-Series Publications > Internal Debt - Marketable > GOI Dated Securities > Quarterly. 2. Internal and External Debt (Public) 1. Total Internal Sovereign Debt 2. Total External Sovereign Debt 3. External Sovereign Debt as % of total outstanding External Debt 4. Ratio of Total External Sovereign Debt to Foreign Exchange Reserves 5. Ratio of Short-term (by residual maturity) External Sovereign Debt to Foreign Exchange Reserves 3. Assumptions for the future 1. GDP Growth (%) 2. GFD/GDP (%) 3. Expected weighted average cost 4. Expected Total (Gross) borrowings 5. Repayment 6. Net Market Borrowing 4. A related note - [[Budget Deficit, Monetised Deficit, Primary Subscriptions]] ### Drivers of long-term (10 year) G-sec yields 1. The long-term (10 year) G-sec yields are significantly affected by global factors such as US financial market developments – much more than domestic factors like inflation surprises [^2] . 1. Other local factors are: [^3] 1. policy actions on the rate front 2. open market operations conducted by the Reserve Bank, 3. revisions in FII investment limits in Government securities, 4. any broadening of investor base for investment in Government securities, 5. persistence of inflationary pressure, etc. 2. In the present phase of policy tightening, the relatively synchronous movement of US long-term yields and domestic yields of similar maturities underscores this phenomenon. 3. The first point in transmission of changes in the policy rate is the inter-bank call money rate and then subsequently, ==it is then expected to get transmitted to longer term risk-free interest rates==, that is G-Sec yields, and the other traded financial instruments, and finally to loan and deposit rates. 4. **Local factors:** Concerns about fall in revenue receipts, lower than expected GST collections and unmet targets in disinvestment proceeds can lead to market expectations of additional borrowing and upward movement in yields. Excess supply of G-secs can lead to higher longer-term yields. 1. As the pricing of market instruments are directly or indirectly based on the G-sec yields, the increase in yields of government securities has a corresponding impact on the yields of corporate bonds and other instruments. This can limit market access for the borrowers and also the positive effect of policy easing, if any. 2. [[Open Market Operations (OMOs)#^fc9c8c|G-SAP]] operation was aimed to stabilise bond yields, keeping in mind certain segments of the financial markets that rely on the G-Sec yield curve as a pricing benchmark, viz. rates on corporate bonds, debentures, commercial paper-CP (7 days to 1-year), 91-day treasury bills, certificates of deposit (CDs) and more. 5. A big challenge for RBI is to manage the trade-off between inflation and government borrowing. 6. [Box V.2-Dynamics of Yield Curve](RBI_Annual%20Report_2004.pdf#page=84&selection=4,0,4,14) in RBI's Annual Report 2004 7. **Related:** ==[[Budget Deficit, Monetised Deficit, Primary Subscriptions|3 concepts]]: Budget Deficit, monetised deficit or the net RBI credit to the Government and RBI's support in primary issues of Central Government securities.== #deficit ### Outstanding Liabilities > [!normal] > 1. ==All the outstanding liabilities of the central govt. is not in form of debt through issuance of securities.== > 2. Here's the composition of the total outstanding liabilities: > 1. Total outstanding liabilities = Total Internal liabilities (A) + External Debt (B) > 1. Total Internal liabilities (A) = Internal Debt (C) + Other internal liabilitIes/Public Accounts(D) > 1. <span style="color:red;">Internal Debt (C) = Outstanding Securities = Marketable debt (E) + Non-marketable debt (F)</span> > 1. Marketable debt (E) = Market loans(dated securities) + 91-day treasury bills + 182/364-day treasury bills + CMB. > 2. Non-marketable debt (F) = 14 Day Intermediate Treasury Bills, Compensation & Other Bonds, Securities issued to International Financial Institutions, securities against small savings > 2. Other internal liabilitIes = National Small Savings Fund + State Provident Fund + Other Account + Reserve funds & Deposit ((i) Bearing Interest + (ii) Not bearing interest) > 2. Total External liabilities (B) = Loans by central govt. from Multilateral + Bilateral agencies. *There is no borrowing from international capital market by govt. of India. As State Governments are not empowered to contract external debt, all external loans are contracted by the Central Government and those intended for State Government projects are on-lent to States > 3. Internal Debt (C) represents total stock of outstanding securities of central govt. > 4. Public Debt = Internal Debt + External Debt > 5. External Debt of India is different from external debt of govt. of India. > 6. *As State Governments are not empowered to contract external debt, all external loans are contracted by the Central Government and those intended for State Government projects are on-lent to States* <div style="background-color:#fff8e1; padding:8px; border-radius:10px;"> <iframe src="https://docs.google.com/spreadsheets/d/e/2PACX-1vS7W3eMecmgdKN8JLkDF55eTxgYp3e6GAHpDy93maoTwRp5W2geNavJAW1aUPuWg-H-hJDd7nmxTR2L/pubhtml?gid=167732409&amp;single=true&amp;widget=true&amp;headers=false" width="100%" height="500" style="border:0; overflow:auto; resize:both; aspect-ratio:16/9;"></iframe> </div> ### Outstanding stock of debt 1. [[G-Secs-Primary Market#Data Releases|List]] ### Fiscal-Monetary Co-ordination in India - An Assessment 2013 1. [[Fiscal-Monetary Co-ordination in India - An Assessment 2013 OPEN|Link]] ## Secondary Market 1. A detailed note is [[G-Secs-Secondary Market|here]]. > [Box II.10 - Cyclicality of Fiscal Policy: The Indian Experience](RBI_Annual%20Report_2013.pdf#page=75&selection=235,0,236,51) in RBI's Annual Report 2013 ## Data Releases 1. **Annual** 1. The [Status Paper](https://dea.gov.in/reports-public-debt-management) on the Government Debt, available on the Ministry of Finance’s website. 1. This document provides a detailed analysis of the Overall Debt Position of the Government of India. The Ministry of Finance, Central Government has been bringing-out a Status Paper on Government Debt *since 2010-11.* 2. [Handbook of Statistics on Indian Economy](https://rbi.org.in/Scripts/AnnualPublications.aspx?head=Handbook%20of%20Statistics%20on%20Indian%20Economy) 2. **Half-Yearly Report** 1. [Monetary Policy Report](https://rbi.org.in/Scripts/HalfYearlyPublications.aspx?head=Monetary%20Policy%20Report) 2. [Financial Stability Report](https://rbi.org.in/Scripts/FsReports.aspx) 3. **Quarterly** 1. [India's External Debt](https://rbi.org.in/scripts/Pr_DataRelease.aspx?SectionID=355&DateFilter=Year) 2. DEA (MoF, Govt. of India). [Quarterly](https://dea.gov.in/public-debt-management. ) Report on Public Debt Management by [Public Debt Management Cell](https://dea.gov.in/public-debt-management-cell). [Link](https://dea.gov.in/reports-public-debt-management) 4. **Monthly** 1. RBI Bulletin - Auctions of Treasury Bills 2. Treasury Bills – Ownership Pattern 5. **Weekly** 1. [Government of India: Treasury Bills Outstanding](https://rbi.org.in/Scripts/WSSView.aspx?Id=28125) 2. [Market Borrowings by the Government of India and State Governments - Dated Securities](https://rbi.org.in/Scripts/WSSView.aspx?Id=28126) **Occasional** 3. [Macroeconomic and Monetary Developments](https://rbi.org.in/Scripts/AnnualPublications.aspx?head=Macroeconomic%20and%20Monetary%20Developments) 6. **Outstanding Stock of Debt** 1. Financial Market Watch (RBI's Homepage) - [Link](https://rbi.org.in/scripts/financialmarketswatch.aspx) 1. [Outstanding Government of India Securities](https://rbi.org.in/scripts/bs_viewcontent.aspx?Id=3974) - It does not include special securities 2. [Outstanding Government of India STRIPS](https://rbi.org.in/scripts/bs_viewcontent.aspx?Id=3973) 3. [Outstanding State Government Securities](https://rbi.org.in/scripts/bs_viewcontent.aspx?Id=4433) 2. WSS - [Government of India: Treasury Bills Outstanding](https://rbi.org.in/Scripts/WSSView.aspx?Id=28125) 3. Quarterly - [External Debt](https://rbi.org.in/scripts/PublicationsView.aspx?id=8326#T8) 4. Monthly - [Monthly Newsletter of CCIL](https://www.ccilindia.com/rakshitra) 5. Quarterly - [CCIL Debt Market Quarterly](https://www.ccilindia.com/india-debt-market-quarterly) ## Regulatory Framework 1. [Government Securities Act, 2006](https://www.rbi.org.in/commonman/english/Scripts/FAQs.aspx?Id=380) 1. [Government Securities Regulations](https://www.rbi.org.in/commonman/english/Scripts/FAQs.aspx?Id=380), 2007 was framed to carry out the purposes of the G S Act. ## FAQs 1. [Nov 12, 2021 Retail Direct Scheme](https://rbi.org.in/Scripts/FAQDisplay.aspx?Id=145) 2. [Apr 14, 2020 RBI as Banker to Government](https://rbi.org.in/Scripts/FAQDisplay.aspx?Id=61) 3. [Apr 01, 2020 Government Securities Market in India – A Primer](https://rbi.org.in/Scripts/FAQDisplay.aspx?Id=79) 4. [Feb 04, 2019 Sovereign Gold Bond Scheme](https://rbi.org.in/Scripts/FAQDisplay.aspx?Id=109) 5. [Nov 23, 2017 Non-competitive Bidding Facility for Dated Securities and Treasury Bills of the Government of India](https://rbi.org.in/Scripts/FAQDisplay.aspx?Id=49) 6. [Mar 26, 2014 Inflation Indexed National Saving Securities - Cumulative (IINSS-C)](https://rbi.org.in/Scripts/FAQDisplay.aspx?Id=99) 7. [Jun 03, 2013 Additional FAQs on Inflation Indexed Bonds (Accounting Norms)](https://rbi.org.in/Scripts/FAQDisplay.aspx?Id=93) 8. [May 28, 2013 Inflation Indexed Bonds (IIBs)](https://rbi.org.in/Scripts/FAQDisplay.aspx?Id=91) 9. [Oct 18, 2012 NDS-OM web](https://rbi.org.in/Scripts/FAQDisplay.aspx?Id=86) 10. [Jul 09, 2012 The Government Securities Act, 2006 and The Government Securities Regulations, 2007](https://rbi.org.in/Scripts/FAQDisplay.aspx?Id=70) ## Related 1. [[G-Secs-Secondary Market]] 1. [[Open Market Operations (OMOs)]] 2. [[Repos and Tri-Party Repo]] 2. [[Money Market Operations (MMO)]] 3. [[Reserve Money]] 4. [[State Development Loans]] 5. [[STRIPS]] 6. [[Fiscal-Monetary Policy Interface in India - OPEN]] 7. [[Fiscal-Monetary Co-ordination in India - An Assessment 2013 OPEN]] 8. [[Fiscal Policy and Economic Reforms OPEN]] 9. [[Financial Stability-Issues and Challenges - By Duvvuri Subbarao, 2009]] # References ### [[Speeches & Media Interactions|Speeches]] 1. Y.V. Reddy. (March 8, 1997). (Budget and RBI : New Directions - A [speech](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=227) by Dr. Y.V. Reddy at Hyderabad on March 8, 1997. 2. Rakesh Mohan. (March 20, 2004). ==A Decade of Reforms in Government Securities Market in India and the Road Ahead==. Annual Conference of FIMMDA jointly organised by Fixed Income Money Market Dealers Association of India (FIMMDA) and Primary Dealers Association of India (PDAI), Dubai. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=178) | [pdf](RBI_Speeches_2004_A%20Decade%20of%20Reforms%20in%20Government%20Securities%20Market%20in%20India%20and%20the%20Road%20Ahead_Rakesh%20Mohan.pdf) 3. Y.V.Reddy. (Sep 13, 2007). ==India: Development and Reform Experience; and Prospects== - Address by Dr. Y.V.Reddy, Governor, Reserve Bank of India at the Bank of Mexico, Mexico City on September 12, 2007. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=351) 4. Shyamala Gopinath. (June 29, 2009). ==Sub-national Fiscal Reforms and Debt Management - Indian Experience==. (Paper presented by Shyamala Gopinath, DG, RBI). [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=426) 5. Harun R Khan. (April 2, 2014). ==Regulation of Indian Debt & Derivatives Markets: Some perspectives on post-crisis paradigm== - keynote address by Shri Harun R Khan, Deputy Governor, Reserve Bank of India delivered at 15th FIMMDA-PDAI Annual Conference at Jaipur on March 8, 2014. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=885) 6. Harun R Khan. (Aug 12, 2014). ==Public Debt Management: Reflections on Strategy & Structure.== Based on the keynote address delivered by Shri Harun R Khan, Deputy Governor, Reserve Bank of India at the 9th Annual International Conference on “Public Policy & Management: Debt Management” at Indian Institute of Management, Bangalore on August 11, 2014). [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=909) 7. G Padmanabhan. (January 19, 2015). ==Changing Contours of Debt Management== - Address by Shri G Padmanabhan, Executive Director at the Annual Meet of Primary Dealers Association of India on January 17, 2015. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=936) 8. Harun R Khan. (Apr 19, 2016). ==Indian Debt Market 2020 : The Underpinnings & the Path Ahead==. (Shri Harun R Khan, Deputy Governor - April 15, 2016 - at the 17th Annual Conference of FIMMDA-PDAI, London). [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=997) 9. Viral V. Acharya. (June 29, 2019). ==Development of Viable Capital Markets – The Indian Experience==. Dr. Viral V. Acharya, Deputy Governor, Reserve Bank of India at the Indian School of Business, Hyderabad. [Link](https://rbi.org.in/commonman/english/Scripts/speeches.aspx?Id=3150) | [pdf](RBI_Speeches_20190629_Development%20of%20Viable%20Capital%20Markets%20–%20The%20Indian%20Experience.pdf) 10. Shaktikanta Das. (Sep 05, 2022). ==Financial Market Reforms: Approach and Expectations== - Address by Shri Shaktikanta Das, Governor, Reserve Bank of India - September 05, 2022 - at FIMMDA annual event, Mumbai. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1325) 11. Shaktikanta Das. (2024, April 8). Evolution of financial markets in India: Charting the Future. A [Speech](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1430#:~:text=Markets%20for%20Funding-,Government%20securities%20market,-9.%20A%20key) by Shri Shaktikanta Das ### [[Publications (Data Releases) & Research#Research|Research]] 1. RBI. (2008, Winter). Auctions of Government Securities in India - An Analysis. \[RBI, Occasional Papers Vol. 29, No. 3, Winter 2008\]. [Link](https://www.fimmda.org/uploads/general/01agrs08091.pdf) 2. RBI. (August 14, 2009). ==An outline of the post 2009 FRBM Fiscal Architecture of the Union Government in the Medium Term==. DRG Studies. [Link](https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=21196) 3. RBI. (August, 2011). Determinants of [Primary Yield Spreads of States](https://www.rbi.org.in/scripts/PublicationsView.aspx?id=13553) in India: An Econometric Analysis - August 2011, RBI [Working Paper Series](RBI Working Paper Series No. 10) No. 10 4. Balbir Kaur and Atri Mukherjee. (2012). *Threshold Level of Debt and Public Debt Sustainability: The Indian Experience*. RBI Occasional Papers, 33(1&2). [Link](https://rbi.org.in/scripts/bs_viewcontent.aspx?Id=2843) ### [[Publications (Data Releases) & Research#Publications|Publications]] 1. RBI. (Sept. 20, 1991). ==Report on Development of Government Securities Market In India==. [pdf](https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/CR488_1991CDEB13B8887D426EAEF117AE7A61A72D.PDF) 2. RBI. (Aug 6, 1999). ==Report on Repurchase Agreements (Repos)==. [Link](https://rbi.org.in/Scripts/PublicationReportDetails.aspx?FromDate=08/06/99&SECID=2&SUBSECID=8) 3. RBI. (2005). ==[Report](https://rbi.org.in/scripts/PublicationReportDetails.aspx?ID=443) of the Internal Technical Group on Central Government Securities Market.== 4. RBI. (2006). [The Government Securities Act, 2006](https://www.rbi.org.in/commonman/english/Scripts/FAQs.aspx?Id=380) 5. RBI. (2007). (March 2007). Manual on Financial and Banking Statistics. [Link](https://rbi.org.in/scripts/AnnualPublications.aspx?head=Manual%20on%20Financial%20and%20Banking%20Statistics%20-%20March%202007) 6. RBI. **(May 31, 2007)**. ==[Government Securities Market](https://rbi.org.in/scripts/PublicationReportDetails.aspx?ID=503)== 7. RBI. (Sept, 2008). Committee on Financial Sector Reforms (Rajan Committee, 2008) - *A Hundred Small Steps*. [pdf](RBI_Report-Committee_20080912_Committee%20on%20Financial%20Sector%20Reforms_2008_A%20Hundred%20Small%20Steps_Chairman-Raghuram%20Rajan.pdf) 8. RBI. **(Aug 13, 2012)**. ==[Report](https://rbi.org.in/scripts/PublicationReportDetails.aspx?ID=677#f2) of the Working Group on Enhancing Liquidity in the Government Securities and Interest Rate Derivatives Markets== 9. RBI. (2015). [Report](RBI_Reports_20151231_Debt%20Management%20Strategy%20for%20India.pdf) 10. RBI. **(April 1, 2020)**. [Government Securities Market in India – A Primer](https://www.rbi.org.in/commonman/English/scripts/FAQs.aspx?Id=711) - [FAQs](https://www.rbi.org.in/commonman/English/scripts/FAQs.aspx) 11. RBI. (July, 2020). Liquidity Management in the Time of Covid-19: An Outcomes Report in [RBI Bulletin-July 2020](https://rbi.org.in/Scripts/BS_ViewBulletin.aspx?Id=19658) 12. RBI. (2022). Box VII.1-RBI Retail Direct Scheme. Annual Report-2022. [pdf](RBI_Annual%20Report_2022.pdf#page=183&selection=5,0,5,24) 13. RBI. (Nov 11, 2020). India’s Gilt Market. RBI-Bulletin. [Link](https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=19897) | [pdf](RBI_Monthly_Bulletin_Article_20201111_India’s%20Gilt%20Market.pdf) 14. RBI. (Nov 12, 2021). FAQs on [Retail Direct Scheme](https://www.rbi.org.in/commonman/english/scripts/FAQs.aspx?Id=3337) 15. RBI. **(Jan 19, 2024)**. Open Market Operations in India – An Appraisal. RBI-Bulletin. [Link](https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=21536#FN3) | [pdf](RBI_Monthly_Bulletin_Article_20230119_Open%20Market%20Operations%20in%20India%20–%20An%20Appraisal.pdf) 16. RBI. (May 02, 2025). Report of the Working Group on Comprehensive Review of Trading and Settlement Timings of Markets Regulated by the Reserve Bank. [Link](https://rbi.org.in/scripts/PublicationReportDetails.aspx?ID=1292) | [pdf](RBI_Group-Committee_20250502_Working%20Group%20on%20Comprehensive%20Review%20of%20Trading%20and%20Settlement%20Timings%20of%20Markets%20Regulated%20by%20the%20Reserve%20Bank.pdf) 17. DEA. (2022). Framework for Sovereign Green Bonds of Government of India. [pdf](GoI_2022_Framework%20for%20Sovereign%20Green%20Bonds%20Government%20of%20India_DEA.pdf) ### Others 1. DEA (MoF, Govt. of India). ==[Quarterly Reports](https://dea.gov.in/reports-public-debt-management) on Public Debt Management by [Public Debt Management Cell](https://dea.gov.in/public-debt-management-cell)==[ 2. K. Kanagasabapathy & C. Singh. (2014). Debt Management in India: Need for Separation and Independence. Economic and Political Weekly_, 49(26/27), 23–25. 3. SEBI. (Sept. 25, 2013). ==SEBI DRG Study titled Foreign Investment in Indian Government Bond Market==. [pdf](SEBI_20130925_DRG_Foreign%20Investment%20in%20Indian%20Government%20Bond%20Market.pdf) 4. Charan Singh. (2015). Separation of debt and monetary management in India. IIMB Management Review. Volume 27, Issue 1. 2015. Pages 56-71. ISSN 0970-3896. [Link](https://doi.org/10.1016/j.iimb.2015.01.007) 5. Ashima Goyal (former RBI-MPC member). (Jan 11, 2018). *Government securities market: Price discovery and the cost of Indian government borrowing*. NSE-IEA Lecture Series on Financial Economics. [Link](https://nsearchives.nseindia.com/research/content/G_Secs_IEA_talk_AGoyal.pdf) 6. Rajaram S., Ghose P. (CCIL), (2019). Indian Sovereign Bond Market - An Update. Rakshitra (Dec, 2019) by CCIL. [[CCIL_201912_Rakshitra.pdf|pdf]] 7. <span style="color:red;">Ministry of Finance. (2024, July 15). Status <a href="https://dea.gov.in/sites/default/files/Status%20Paper%20on%20Government%20Debt%20for%202022-23.pdf" target="_blank">Paper</a> on Government Debt for 2022–2023. <a href="https://dea.gov.in/divisionbranch/budget-division" target="_blank">Budget Division</a>, Department of Economic Affairs, Ministry of Finance.</span> 8. CCIL. (October, 2024). Rakshitra-Monthly Newsletter by CCIL. [Link](( https://www.ccilindia.com/documents/d/ccil/Outstanding_Government_Debt%20Rakshitra-pdf) 9. CCIL. (October, 2024). *CCIL Broad and Liquid Index*. [Link]((https://www.ccilindia.com/documents/43866/1293307/CCIL%20Bond%20Index%20Methodology_1716298351593.pdf) 10. Vardhana Pawaskar and Payal Ghose (CCIL). (January 2025). Retail Participation in Government Securities Market - A Potential Game Changer for Vision Viksit Bharat. Working Paper Serial No. ER/015. Research Department, CCIL. [Link](https://www.ccilindia.com/documents/d/ccil/Retail%20Participation%20in%20Government%20Securities%20Market%20WP-pdf) 11. Eichengreen, B., & Gupta, P. (2025). Public debt in India. NCAER Working Paper 148. [Link](https://www.niti.gov.in/sites/default/files/2025-03/Public-Debt-in-India_Eichengreen-and-Gupta_0.pdf) 12. www.the1991project.com 13. NSE. Chapter on Debt Market - [NSE](https://nsearchives.nseindia.com/web/sites/default/files/inline-files/ISMR-chapter6-web.pdf) [^1]: [Changing Contours of Debt Management](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=936) (Address by Shri G Padmanabhan, Executive Director at the Annual Meet of Primary Dealers Association of India on January 17, 2015). [^2]: RBI. (2024, Jan 19). [Open Market Operations in India – An Appraisal](https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=21536#:~:text=In%20the%20present%20phase%20of%20policy%20tightening%2C%20the%20relatively%20synchronous%20movement%20of%20US%20long%2Dterm%20yields%20and%20domestic%20yields%20of%20similar%20maturities%20underscores%20this%20phenomenon) [^3]: Khan, H. R. (2012, October 16). _Managing currency and interest rate risks: New challenges for banks & corporates_ \[Speech\]. RBI. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=744) [^4]: Balbir Kaur and Atri Mukherjee. (2012). *Threshold Level of Debt and Public Debt Sustainability: The Indian Experience*. RBI Occasional Papers, 33(1&2). [Link](https://rbi.org.in/scripts/bs_viewcontent.aspx?Id=2843) [^5]: Shaktikanta Das. Sep 05, 2022. Financial Market Reforms: Approach and Expectations - Address by Shri Shaktikanta Das, Governor, Reserve Bank of India - September 05, 2022 - at FIMMDA annual event, Mumbai. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1325) [^6]: Harun R Khan. (Aug 12, 2014). *Public Debt Management: Reflections on Strategy & Structure.* Based on the keynote address delivered by Shri Harun R Khan, Deputy Governor, Reserve Bank of India at the 9th Annual International Conference on “Public Policy & Management: Debt Management” at Indian Institute of Management, Bangalore on August 11, 2014). [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=909) [^7]: RBI. (January 19, 2015). _Changing Contours of Debt Management_. \[Address by Shri G Padmanabhan, Executive Director at the Annual Meet of Primary Dealers Association of India on January 17, 2015\]. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=936) [^8]: Vardhana Pawaskar and Payal Ghose (CCIL). (January 2025). Retail Participation in Government Securities Market - A Potential Game Changer for Vision Viksit Bharat. WORKING PAPER Serial No. ER/015. Research Department, CCIL. [Link](https://www.ccilindia.com/documents/d/ccil/Retail%20Participation%20in%20Government%20Securities%20Market%20WP-pdf) [^9]: Rakesh Mohan. (March 20, 2004). ==A Decade of Reforms in Government Securities Market in India and the Road Ahead==. Annual Conference of FIMMDA jointly organised by Fixed Income Money Market Dealers Association of India (FIMMDA) and Primary Dealers Association of India (PDAI), Dubai. [Link](https://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=178) | [pdf](RBI_Speeches_2004_A%20Decade%20of%20Reforms%20in%20Government%20Securities%20Market%20in%20India%20and%20the%20Road%20Ahead_Rakesh%20Mohan.pdf)