Centre to borrow ₹6.55 trillion in H2 FY24
₹6.55 trillion for the second half of the ongoing financial year which will be 42.45% of its gross market borrowing of ₹15.43 trillion for the full FY24. The borrowing will be done through dated securities, including ₹20,000 crore through the issuance of Sovereign Green Bonds, the finance ministry said in a statement on Tuesday. While the government will stick to its borrowing plan for the year, it will issue 50-year security for the first time, in response to market demand for longer-duration securities, the ministry added.
The borrowing programme is finalised in consultation with the RBI, the ministry said. The Centre has budgeted a gross market borrowing of ₹15.43 trillion in FY 2024. The borrowing in the second half of the year will be completed through 20 weekly auctions, spread over 3, 5, 7, 10, 14, 30, 40 and 50 years' securities, with different shares.
Finance minister Nirmala Sitharaman in her budget speech for FY24 had projected a fiscal deficit of ₹17.86 trillion accounting for 5.9% of the nominal gross domestic product (GDP). Centre is pursuing a target of a fiscal deficit lower than 4.5% of GDP by FY26. The share of borrowing (including sovereign green bonds) under different maturities will be: 3 years (6.11%), 5 years (11.45%), 7 years (9.16%), 10 years (22.90%), 14 years (15.27%), 30 years (12.21%), 40 years (18.32%) and 50 years (4.58%).
Switching of securities will be carried out to smoothen the redemption profile. Out of the ₹1 trillion of budgeted switch amount, ₹51,597 crore of switch auctions have already been conducted and the balance amount of switch auctions will be conducted in the second half. The government will continue to exercise the greenshoe option to retain an additional subscription of
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