Centre sticks to target, to borrow Rs 6.55 lakh crore in H2
borrow ₹6.55 lakh crore from the market through dated securities in the second half of this financial year, staying with the budget estimate and indicating a comfortable fiscal situation for now.
In the first half of 2023-24, the government announced ₹8.88 lakh crore market borrowing out of the full-year target of ₹15.43 lakh crore. The second half market borrowing will include a new 50-year security for the first time, the finance ministry said in a statement.
It said ₹20,000 crore will be raised through sovereign green bonds in the second half, as against ₹16,000 crore a year ago. «The government is broadly sticking to its borrowing plans, showing fiscal prudence.
This should help calm nerves for markets amid rising global headwinds of higher oil prices and US rates,» said Rahul Bajoria, head, EM Asia (ex-China) Economics at Barclays.
'50-year bond to test investor appetite for long-term papers'
Ahead of the decision, the yield on ten-year benchmark eased to 7.14% on Tuesday from 7.15% the preceding day.
JPMorgan Chase & Co last week added Indian government bonds to its flagship emerging market gauge, which is expected to bring in about $30 billion in fresh flows.
At the end of July, the Centre's fiscal deficit had hit 33.9% of the full-year estimate, compared to 20.5% a year ago, raising some concern over whether the government would be able to meet the fiscal deficit target of 5.9% of GDP.
India Ratings chief economist DK Pant said, «Adherence to budgeted FY24 market borrowing target is likely to be a neutral event for the bond market.
