Government to borrow ₹7.86 lakh cr in H2 FY27; Sovereign Green Bonds to raise ₹15,000 cr

The Government of India will borrow ₹7.86 lakh crore through dated securities in the second half of FY27, including ₹15,000 crore through Sovereign Green Bonds (SGrBs). The borrowing calendar has been finalised in consultation with the Reserve Bank of India (RBI).

The government’s total market borrowing through dated securities for FY27 is now expected to stand at ₹15,99,506 crore, below the Budget Estimate of ₹17,20,000 crore.

The planned ₹7.86 lakh crore H2 borrowing will be conducted through 23 weekly auctions. The government will raise funds through securities with maturities ranging from three years to 50 years.

Ten-year securities will account for the largest share of H2 borrowing at 26.3%. Securities with a 15-year maturity will account for 17.6%, followed by five-year securities at 12.1%.

The government will raise 9.1% through seven-year securities, while three-year securities will account for 6.9% of the borrowing. Longer-duration securities will include 30-year bonds, accounting for 9.2%, 40-year securities at 8.9% and 50-year securities at 9.9%.

The borrowing programme includes the planned issuance of ₹15,000 crore through Sovereign Green Bonds.

The government will also continue with switches and buybacks of government securities to smoothen its redemption profile. It will retain the option to exercise a greenshoe facility, allowing additional subscriptions of up to ₹2,000 crore against each security specified in the auction notifications.

Treasury Bill borrowing

For the third quarter of FY27, the government plans to borrow ₹23,000 crore a week through Treasury Bills (T-Bills) over 13 auction weeks.

The borrowing will comprise ₹8,000 crore through 91-day T-Bills, another ₹8,000 crore through 182-day T-Bills and ₹7,000 crore through 364-day T-Bills.

RBI fixes ₹50,000 crore WMA limit

The RBI has fixed the Ways and Means Advances (WMA) limit at ₹50,000 crore for the second half of FY27. The facility is used to address temporary mismatches between government receipts and expenditure.

The government had already reduced its first-half market borrowing by ₹1.11 lakh crore through switches of government securities. For the second half, the planned borrowing has been reduced by another ₹10,000 crore.

As a result, FY27 market borrowing is now ₹1.21 lakh crore below the Budget Estimate. The government will retain the flexibility to conduct further switches and buybacks.

The borrowing plan comes as the government continues to emphasise fiscal prudence while sticking to the estimates outlined for the financial year.