Maintaining its borrowing target, the government will sell bonds worth ₹6.61 lakh crore during October-March period (H2) of current fiscal, the Finance Ministry said on Thursday. The indication is that overall borrowing for the full fiscal could be less than total budget estimates of ₹ 14.01 lakh crore.
The government borrowed ₹7.4 lakh crore during April-September period to bridge the fiscal deficit.
“We floated ₹12,000 crore crore of sovereign green bond (SGrB) in first half of the fiscal but took ₹1,697 crore only as bids were priced higher. Including this in second half will keep us slightly below the full year target of ₹14.01 lakh crore,” a senior Finance Ministry official told businessline.
Meanwhile, out of gross market borrowing of ₹14.01 lakh crore budgeted for FY 2024-25, ₹6.61 lakh crore (47.2 per cent) is planned to be borrowed in second half through issuance of dated securities, including ₹20,000 crore of sovereign green bonds,” the Ministry said. Dated securities refer to government bonds with maturities between 1 year and 50 years. These carry interest and tradable in the market just like equity.
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Borrowing calendar
Borrowing during second half will be done through 21 weekly auctions. The three-year, five-year and seven-year bonds will constitute a combine of 23.5 per cent of total borrowing, while the 10-year and 15-year bonds would constitute 24.8 per cent and 13.2 per cent respectively. The share of 30-year and 40-year bonds would be at 12.1 per cent and 15.9 per cent, while that of 50-year bonds would be 10.6 per cent.
Earlier, bond yields had declined earlier in the day as some market participants were expecting a cut in the borrowing. The benchmark 10-year yield ended at 6.7 per cent, its lowest since February 21, 2022.
Separately, the government will gross borrow ₹2.47 lakh crore through treasury bills, which have maximum tenure of 364 days. The government will sell ₹19,000 crore of treasury bills every week, and this includes ₹7,000 crore of 91-day papers, and ₹6,000 each of 182-day and 364-day notes. Such bills do not carry any interest. These are issued at discount and redeemed at face value.
Additionally, the Reserve Bank of India has fixed the Ways and Mean Advances - temporary advances given by the central bank to the government to tide over financing gaps - at ₹50,000 crore for the October-March period, the ministry said.