Centre finalises H2FY25 borrowing to Rs 6.61 lakh crore
The upcoming quarter is poised to host 21 auctions, the initial of which will commence on September 30. During this auction, the government plans to offer paper valued at Rs 39,000 crore, comprising Rs 22,000 crore for 10-year bonds and Rs 10,000 crore for 50-year securities.
- Sep 26, 2024,
- Updated Sep 26, 2024 7:48 PM IST
The Centre on Thursday said it has finalised its borrowing programme for the second half (H2) of FY 2024-25 to Rs 6.61 lakh crore. This aligns with the projected target for the latter half of the fiscal year. It is anticipated that loans exceeding Rs 7 lakh crore will be obtained in the initial six months of the year, with nearly 40% secured through extended bond durations.
The upcoming quarter is poised to host 21 auctions, the initial of which will commence on September 30. During this auction, the government plans to offer paper valued at Rs 39,000 crore, comprising Rs 22,000 crore for 10-year bonds and Rs 10,000 crore for 50-year securities.
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%), 5-year (10.6%), 7-year (7.6%), 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. The Government will continue to reserve the right to exercise greenshoe option to retain an additional subscription of up to Rs 2,000 crore against each of the securities indicated in the auction notifications.
Weekly borrowing through issuance of Treasury Bills in the third quarter (Q3) of FY 2024-25 is expected to be Rs 19,000 crore for 13 weeks with issuance of Rs 7,000 crore under 91 DTBs, Rs 6,000 crore under 182 DTBs and Rs 6,000 crore under 364 DTBs, respectively. 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 Rs 50,000 crore.
Aditi Nayar, Chief Economist & Head - Research and Outreach at ICRA, said: "The Government of India (GoI) maintained its gross borrowing figure for H2 FY2025 at Rs. 6.61 trillion, in line with ICRA’s expectations. While this is only marginally higher than year-ago levels, a sharp decline in redemptions would entail a sharp 32% YoY expansion in the net borrowings to Rs. 6.0 trillion in the second half of the fiscal. Aided by the favourable outlook for revenues and a possible undershooting of the ambitious capex target, ICRA expects the GoI’s fiscal deficit to print in line with or mildly trail the FY2025 RBE of Rs. 16.1 trillion or 4.9% of GDP, at the current juncture. Therefore, the market borrowings appear unlikely to exceed the announced level for H2 FY2025."
The Centre on Thursday said it has finalised its borrowing programme for the second half (H2) of FY 2024-25 to Rs 6.61 lakh crore. This aligns with the projected target for the latter half of the fiscal year. It is anticipated that loans exceeding Rs 7 lakh crore will be obtained in the initial six months of the year, with nearly 40% secured through extended bond durations.
The upcoming quarter is poised to host 21 auctions, the initial of which will commence on September 30. During this auction, the government plans to offer paper valued at Rs 39,000 crore, comprising Rs 22,000 crore for 10-year bonds and Rs 10,000 crore for 50-year securities.
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%), 5-year (10.6%), 7-year (7.6%), 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. The Government will continue to reserve the right to exercise greenshoe option to retain an additional subscription of up to Rs 2,000 crore against each of the securities indicated in the auction notifications.
Weekly borrowing through issuance of Treasury Bills in the third quarter (Q3) of FY 2024-25 is expected to be Rs 19,000 crore for 13 weeks with issuance of Rs 7,000 crore under 91 DTBs, Rs 6,000 crore under 182 DTBs and Rs 6,000 crore under 364 DTBs, respectively. 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 Rs 50,000 crore.
Aditi Nayar, Chief Economist & Head - Research and Outreach at ICRA, said: "The Government of India (GoI) maintained its gross borrowing figure for H2 FY2025 at Rs. 6.61 trillion, in line with ICRA’s expectations. While this is only marginally higher than year-ago levels, a sharp decline in redemptions would entail a sharp 32% YoY expansion in the net borrowings to Rs. 6.0 trillion in the second half of the fiscal. Aided by the favourable outlook for revenues and a possible undershooting of the ambitious capex target, ICRA expects the GoI’s fiscal deficit to print in line with or mildly trail the FY2025 RBE of Rs. 16.1 trillion or 4.9% of GDP, at the current juncture. Therefore, the market borrowings appear unlikely to exceed the announced level for H2 FY2025."