Government to borrow Rs 7.5 lakh crore from the market in the first half of 2024-25
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New Delhi (Uttam Hindu News): Of the gross market borrowings of Rs 14.13 lakh crore estimated in the Union Budget for FY 2024-25, the government has decided to borrow Rs 7.50 lakh crore (53.08 per cent) in the first half (H1) April-September through dated securities. The Finance Ministry gave this information on Wednesday.
Of this amount, Rs 12,000 crore is proposed to be raised by issuing Sovereign Green Bonds (SGRB). It has also been decided to introduce a new dated security of 15-year tenure based on market feedback and in line with global market practices. The Finance Ministry said that the lending program has been finalized in consultation with the Reserve Bank of India.
Gross market borrowings of Rs 7.50 lakh crore will be financed through 26 weekly auctions. Market borrowings will be in the form of securities of 3, 5, 7, 10, 15, 30, 40 and 50 years. The share of borrowings under various maturities (including SGRB) 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 years (8.93 percent), 40 years (19.47 percent) and 50 years (8.93 percent). The government will continue to make changes to the securities to streamline the redemption profile.
The Government will reserve the right to exercise the greenshoe option to retain additional subscription up to Rs 2,000 crore against each of the securities indicated in the auction notifications. Weekly borrowing through treasury bill issuance in Q1FY2024-25 is expected to be Rs 27,000 crore for the first seven auctions and Rs 22,000 crore for the subsequent six auctions, with net borrowing at (-) Rs 3,000 crore .
The first seven auctions will see weekly issuance of Rs 12,000 crore under 91 DTB, Rs 7,000 crore under 182 DTB and Rs 8,000 crore under 364 DTB and weekly issuance of Rs 10,000 crore under 91 DTB, Rs 5,000 crore under 182 DTB. And Rs 7,000 crore will be raised under 364 DTBs in six auctions to be conducted during the quarter.
To take care of temporary anomalies in government accounts, the Reserve Bank of India has fixed the limit of Wages and Mean Advance (WMA) for the first half of the financial year 2024-25 at Rs 1.50 lakh crore.
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