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The government on Thursday announced its plans to borrow Rs 6.61 trillion from the market in the second half of the current financial year, which is around 47 per cent of the total gross market borrowing target of Rs 14.01 lakh crore and in line with market expectations.
This includes the issuance of Rs 20,000 crore of Sovereign Green Bonds. The gross market borrowing of Rs 6.61 trillion will be completed through 21 weekly auctions.
The finance ministry, while releasing the calendar for the issuance of Government of India dated securities, said that the market borrowing will be spread over three-, five-, seven-, ten-, 15-, 30-, 40-, and 50-year securities. The share of borrowing, including sovereign green bonds, under different maturities will be: 3-year (5.3 per cent), 5-year (10.6 per cent), 7-year (7.6 per cent), 10-year (24.8 per cent), 15-year (13.2 per cent), 30-year (12.1 per cent), 40-year (15.9 per cent), and 50-year (10.6 per cent).
The finance ministry said that the government will carry out switching or buyback of securities to smoothen the redemption profile.
“Aided by the favourable outlook for revenues and a possible undershooting of the ambitious capex target, ICRA expects the GoI’s fiscal deficit to print in line with or mildly trail the FY25 revised estimate of Rs 16.1 trillion or 4.9 per cent of GDP, at the current juncture,” said Aditi Nayar, chief economist, ICRA Limited.
Nayar said that market borrowings appear unlikely to exceed the announced level for H2 FY25.
The government had announced its plans to borrow Rs 7.50 lakh crore from the market in the April–September period.
The government will borrow Rs 2.47 trillion through treasury bills, which have a maximum tenure of 364 days. The weekly borrowing through the issuance of treasury bills in the third quarter of 2024–25 is expected to be Rs 19,000 crore for 13 weeks, with the issuance of Rs 7,000 crore under 91-day treasury bills (DTBs), Rs 6,000 crore under 182-day DTBs, and Rs 6,000 crore under 364-day DTBs.
To take care of temporary mismatches in government accounts, the Reserve Bank of India has fixed the Ways and Means Advances (WMA) limit for H2 of FY25 at Rs 50,000 crore.
“As hitherto, all the auctions covered by the calendar will have the facility of non-competitive bidding under which five per cent of the notified amount will be reserved for specified retail investors,” the finance ministry said.
In the interim Budget, Finance Minister Nirmala Sitharaman had announced a gross borrowing target of Rs 14.13 lakh crore by issuing dated securities to meet revenue shortfalls in the next financial year. This was, however, reduced by Rs 12,000 crore in the final Budget tabled in July on account of robust revenue collection.
The gross borrowing in this financial year is lower compared to the gross borrowing estimate of Rs 15.43 lakh crore in the last financial year. The government has set a fiscal deficit target of 4.9 per cent of GDP for the current financial year.
First Published: Sep 26 2024 | 7:27 PM IST
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