Government to borrow INR 7.5 lakh crore from market in first half of 2024-25

NEW DELHI — Out of Gross Market borrowing of INR 14.13 lakh crore projected in the Union budget for FY 2024-25, the government has decided to borrow INR 7.50 lakh crore (53.08 per cent) in the first half (H1) of the year (April-Sept) through dated securities, the Finance Ministry said on Wednesday.

As much INR 12,000 crore of this amount is proposed to be raised through the issuance of Sovereign Green Bonds (SGrBs). It has also been decided to introduce a new dated security of 15-year tenor based on market feedback and in line with global market practices.

The Finance Ministry said that the borrowing programme has been finalised in consultation with the Reserve Bank of India.

The gross market borrowing of INR 7.50 lakh crore shall be completed through 26 weekly auctions. The market borrowing will be spread over 3, 5, 7, 10, 15, 30, 40 and 50-year securities.

The share of borrowing (including SGrBs) under different maturities will be: 3-year (4.80 per cent), 5-year (9.60 per cent), 7-year (8.80 per cent), 10-year (25.60 per cent), 15-year (13.87 per cent), 30-year (8.93 per cent), 40-year (19.47 per cent) and 50-year (8.93 per cent).

The government will continue to carry out the switching of securities to smoothen the redemption profile.

The government will continue to reserve the right to exercise the greenshoe option to retain an additional subscription of up to INR 2,000 crore against each of the securities indicated in the auction notifications.

Weekly borrowing through issuance of Treasury Bills in the first quarter (Q1) of FY 2024-25 is expected to be INR 27,000 crore for the first seven auctions and INR 22,000 crore for the subsequent six auctions with net borrowing of INR (-)3,000 crore during the quarter.

There will be weekly issuance of INR 12,000 crore under 91 DTBs, INR 7,000 crore under 182 DTBs and INR 8,000 crore under 364 DTBs in the first seven auctions and weekly issuance of INR 10,000 crore under 91 DTBs, INR 5,000 crore under 182 DTBs and INR 7,000 crore under 364 DTBs in subsequent six auctions to be conducted during the quarter.

To take care of temporary mismatches in Government accounts, the Reserve Bank of India has fixed the Ways and Mean Advances (WMA) limit for H1 of FY 2024-25 at INR 1.50 lakh crore.