NEW DELHI: The Central government is expected to maintain its budgeted borrowing programme for the ongoing financial year, and will sell bonds worth Rs 6.61 lakh crore for the second half of FY25 in line with the Budgeted target, constituting 47.2 per cent of its total gross market borrowing target of Rs 14.01 lakh crore for the fiscal year, the Centre in consultation with the Reserve Bank of India (RBI) announced on Thursday.
“Out of Gross Market borrowing of Rs 14.01 lakh crore budgeted for FY 2024-25, Rs 6.61 lakh crore (47.2 per cent) is planned to be borrowed in H2 through issuance of dated securities, including Rs 20,000 crore of sovereign green bonds (SGrBs),” the ministry of finance said.
The borrowing will be conducted through the issuance of dated securities, including Rs 20,000 crore in SGrBs, spread over 21 weekly auctions. “These borrowings will cover maturities ranging from 3-50 years, with the largest share allocated to 10-year securities or 24.8 per cent, it said.
As per the statement, the government will carry out switching/buyback of securities to smoothen the redemption profile. “It will continue to reserve the right to exercise greenshoe option to retain an additional subscription of up to Rs 2,000 crore against each of the securities indicated in the auction notifications,” it said.
The government had budgeted Rs 14.01 lakh crore of gross borrowing for FY25 in the Budget presented on July 23, lower than Rs 14.13 lakh crore in the interim Budget. This was also a 9 percent reduction from Rs 15.43 lakh crore the Centre had borrowed in FY24.
The reduction in borrowing is likely to help contain the fiscal deficit, where the government has set an aggressive target of 4.9 percent compared with 5.1 percent in the interim Budget.
