The Centre has retained its borrowing target for the current financial year and plans to raise ₹6.61 lakh crore through auction of dated securities during October-March period of 2024-25 to fund the revenue gap to boost economic growth.
“Out of Gross Market borrowing of ₹14.01 lakh crore budgeted for 2024-25, ₹6.61 lakh crore (47.2%) is planned to be borrowed in H2 through issuance of dated securities, including ₹20,000 crore of Sovereign Green Bonds (SGrBs),” the finance ministry said in a statement on Thursday (September 26, 2024).
The gross market borrowing of ₹6.61 lakh crore shall be completed through 21 weekly auctions.
The market borrowing will be spread over 3, 5, 7, 10, 15, 30, 40 and 50 year securities. The share of borrowing (including SGrBs) under different maturities will be 3-year (5.3 per cent), 5-year (10.6%), 7-year (7.6 per cent), 10-year (24.8%), 15-year (13.2%), 30-year (12.1%), 40-year (15.9%) and 50-year (10.6%).
The government will carry out switching/buyback of securities to smoothen the redemption profile, it said.
It will continue to reserve the right to exercise greenshoe option to retain an additional subscription of up to ₹2,000 crore against each of the securities indicated in the auction notifications, it said.
Weekly borrowing through issuance of Treasury Bills in the third quarter of 2024-25 is expected to be ₹19,000 crore for 13 weeks with issuance of ₹7,000 crore under 91 dated treasury bills (DTBs), ₹6,000 crore under 182 DTBs and ₹6,000 crore under 364 DTBs.
To take care of temporary mismatches in government accounts, the Reserve Bank of India has fixed the Ways and Means Advances (WMA) limit for H2 of FY 2024-25 at ₹50,000 crore.
Out of the gross market borrowing of ₹14.01 lakh crore estimated for 2024-25, ₹7.4 lakh crore, or 52.8%, is already raised in first half (H1).
Finance Minister Nirmala Sitharaman in the interim Budget had proposed to borrow ₹14.13 lakh crore by issuing dated securities to meet revenue shortfall in the next financial year.
However, she reduced the gross borrowing estimate by ₹12,000 crore in the final Budget tabled in July on account of robust revenue collection.
The gross borrowing for FY25 is lower than last year’s gross borrowing estimate of ₹15.43 lakh crore, which was the highest ever.
“The gross and net market borrowings through dated securities during 2024-25 are estimated at ₹14.01 lakh crore and ₹11.63 lakh crore respectively. Both will be less than that in 2023-24,” she had said.
There are signs of private investment picking up in the steel and cement sector due to massive capital expenditure by the government.
Against the estimate of ₹10 lakh crore for 2023-24, the government has earmarked ₹11.11 lakh crore for this year.
Published – September 26, 2024 06:48 pm IST