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Government To Borrow Rs 8.88 Lakh Crore In First Half Of FY24

The issuance of Sovereign Green Bonds is expected to be announced in the second half of FY24.

<div class="paragraphs"><p>(Photo: Usha Kunji/BQ Prime)</p></div>
(Photo: Usha Kunji/BQ Prime)

The government plans to borrow Rs 8.88 lakh crore in the first half of the fiscal 2024, which will account for 57.55% of its planned borrowings for the year.

Gross borrowings for the full fiscal are pegged at Rs 15.43 lakh crore.

Last year, the government had borrowed Rs 8.45 lakh crore in the first half, of its total borrowings of Rs 14.31 lakh crore.

The government typically borrows close to 60% of its full-year requirements in the first half of the fiscal.

The Fineprint

The government’s first half borrowing will be spread across 26 weekly tranches of about Rs 31,000-Rs 39,000 crore. Borrowing will be spread across securities—ranging from three to 40-year securities—and will also include floating rate bonds of various tenors.

The share of borrowing under different maturities will be as follows:

  • Three year: 6.31%.

  • Five year: 11.71%.

  • Seven year: 10.25%.

  • 10 year: 20.5%.

  • 14 year: 17.57%.

  • 30 year: 16.10%.

  • 40 year: 17.57%.

Apart from that, the issuance of Sovereign Green Bonds is expected to be announced in the second half of FY24.

"The Government will continue 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 notification," a press release by the ministry said.

The government also released its plan for shorter-term borrowings via treasury bills. Weekly borrowing via treasury bills are expected to be Rs 32,000 crore, with net borrowing of Rs 1.42 lakh crore during the quarter as compared with a net borrowing of Rs 2.40 lakh crore in Q1 FY23.

There will be issuance of Rs 12,000 crore under 91-Day Treasury Bills, Rs 12,000 crore under 182 DTBs and Rs 8,000 crore under 364 DTBs through each weekly auction during the quarter.

The temporary mismatch in the government account will be taken care of by the Ways and Mean Advances, or WMA, limit which has been set at Rs 1.5 lakh crore by the RBI.