India's finance secretary explains the latest borrowing target
The gross market borrowing of ₹7.5 lakh crore will be conducted through 26 weekly auctions and will encompass maturities ranging from 3-50 years, the Finance Ministry said.
The government is slated to borrow slightly lower than anticipated during the April-September period of the next financial year.
As per the borrowing calendar announced by the government on Wednesday (March 27), the Union Finance Ministry will borrow ₹ 7.5 trillion from the market, which is 53% of the FY25 aim of ₹14.13 trillion.
Speaking on the government’s borrowing requirement for the first half of next fiscal, Finance Secretary TV Somanathan said, “Slightly lower first-half borrowing is to optimise the cash balance and reduce interest costs, we don’t want to hold too much money if we don’t need it."
The government has generally been borrowing around 55%-56% of the full-year target during the first half of every financial year, even as high as 58% at one point in time, Finance Secretary Somanathan added. The government’s calibrated borrowing plan also reflects better fiscal management, with buoyant tax revenues and lower revenue expenditure.
The government has also announced a new 15-year paper. The Finance Ministry said, "Based on market feedback and in line with global market practices, it has been decided to introduce a new dated security of 15-year tenor."
Officials indicated the new 15-year paper will replace the 14-year tenor bonds which will be phased out. The government has planned to borrow Rs 1.04 trillion via the new issuance. The government also announced ₹12,000 crore of market borrowing via two tranches of sovereign green bonds for H1 FY25.
(Edited by : Shoma Bhattacharjee)
First Published: Mar 27, 2024 7:12 PM IST
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