The amount is lower than 56-59% of the annual target that some analysts had projected but is slightly higher than what the government had announced for the first half of the current fiscal.
The borrowing includes ₹10,000 crore through sovereign green bonds.
Experts said the borrowing target aims to enable the government to fund its revenue gap in the first half of 2025-26 without causing any disruption in the bond market. It’s also unlikely to crowd out state governments and private players in the debt market, they added.
Yield on the benchmark 10-year securities closed at 6.6022% on Thursday, hitting its lowest in more than three years.
The government has budgeted gross market borrowing of ₹14.82 lakh crore (through dated securities) for 2025-26. Of this, net borrowing is pegged at ₹11.54 lakh crore. It aims to contain its fiscal deficit at 4.4% of gross domestic product during the year, against 4.8% this fiscal. The borrowing in the first half is proposed to be over in 26 weekly tranches of ₹25,000-36,000 crore each, the finance ministry said in a statement.
“As hitherto, all the auctions covered by the (borrowing) calendar will have the facility of non-competitive bidding under which 5% of the notified amount will be reserved for the specified retail investors,” the ministry said.
The share of borrowing under different maturities will be: three-year (5.3%), five-year (11.3%), seven-year (8.2%), 10-year (26.2%), 15-year (14%), 30-year (10.5%), 40-year (14%) and 50-year (10.5%).
“The borrowing target is along the expected lines. The composition of securities with different maturity periods, however, is tweaked a bit,” said India Ratings chief economist DK Pant.
The proportion of shorter tenure (three-five years) papers is proposed to go up to 16.6% from 14.4% a year before and that of longer-term papers (15-50 years) will drop to 49% from 51.2%, Pant said. However, the share of medium-term (seven to 10-year) papers remains the same at 34.4%.
The government will reserve the right to exercise the greenshoe option to retain an additional subscription of up to ₹2,000 crore against each of the securities.
Weekly borrowing through treasury bills is expected to be ₹19,000 crore for 13 weeks, with issuance of 91-day papers worth ₹9,000 crore, 182-day ones worth ₹5,000 crore and another ₹5,000 crore through 364-day securities.
To meet temporary mismatches in the government accounts, the Reserve Bank of India has fixed the ways and means advances limit for the first half at ₹ 1.50 lakh crore.
Content Source: economictimes.indiatimes.com