State Government Finances - SGS redemption profile remains highly front-ended, with Rs. 24 trillion SGS estimated to mature during FY2028-FY2032
ICRA estimates that the stock of state government securities (SGS), the chief source of funding the fiscal deficit of India’s state governments, more than doubled to Rs. 73.0 trillion as on March 31, 2026, from Rs. 32.7 trillion as on March 31, 2020. This was equivalent to nearly 58% of the estimated stock of Government of India securities (G-secs) of Rs. 125.7 trillion as on March 31, 2026. At Rs. 8.3 trillion, Tamil Nadu’s (TN) stock of SGS outstanding was the highest as on March 31, 2026. Additionally, with the SGS outstanding of Maharashtra, Uttar Pradesh (UP), West Bengal (WB) and Karnataka estimated to be at Rs. 5-7 trillion each as of March 2026-end, the combined stock of SGS of these five states was Rs. 33 trillion, or nearly half of the total SGS outstanding of Rs. 73 trillion at the end of March 2026.
Over the years, with the increase in issuance of longer-dated SGS (more than 10 years), the weighted average maturity (WAM) of the stock of SGS rose to 9.8 years by end-March 2026 from 7.0 years at end-March 2020. Of the estimated SGS stock outstanding of Rs. 73 trillion as on March 31, 2026, Rs. 24.0 trillion or a third of the total is expected to be redeemed during FY2028-FY2032. Another Rs. 20.3 trillion is estimated to be redeemed during FY2033-FY2037 and the balance amount would mature till FY2064. These trends indicate a highly front-ended maturity profile of SGS, implying that gross SGS issuance would remain elevated during the next five years i.e. FY2028-FY2032. During this period, the SGS redemptions will be dominated by UP, TN, Maharashtra and Gujarat.
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