Center to Borrow Rs 7.50 Lakh Crore from market in April-September: FM

Ira Singh
Khabar Khabaron Ki,28 Mar’24

The central government plans to borrow Rs 7.50 lakh crore from the market in the April-September period, which is over 53 per cent of the full year target of the financial year 2024-25, the union finance ministry reportedly said on Wednesday. The Ministry of Finance aims to facilitate investment planning and ensure transparency in the Government Securities market.

In the Interim Budget for 2024-25 presented in February, Union Finance Minister Nirmala Sitharaman pegged the full-year gross borrowing from market at Rs 14.13 lakh crore.

The finance ministry on Wednesday released a calendar for issuance of the Government of India dated securities.According to report the central government will raise money from the market via the issuance of government securities through 26 weekly auctions between April 1 and September 30.

The size of the weekly government bond auctions will range from Rs 22,000 crore to Rs 38,000 crore,stated report. The Reserve Bank of India (RBI) manages the borrowing programme on behalf of the government by issuing bonds via auctions every Friday.

The market borrowing in the first half of the 2024-25 financial year will include Sovereign Green Bonds of Rs 12,000 crore. It will be issued in two tranches of Rs 6,000 crore each for a period of 10 years, stated report.

The Centre has also introduced a new dated security of 15-year tenor. “Based on market feedback and in line with global market practices, it has been decided to introduce a new dated security of 15-year tenor,” the finance ministry reportedly said in a statement. The tenor of the securities will range from 3 years to 50 years. In all the auctions, 5% of the notified amount will be reserved for the specified retail investors.

The Ministry has also notified that in relation to each of the securities listed in the auction notifications, it will maintain its right to exercise the greenshoe option and retain an additional subscription of up to Rs 2,000 crore.

The government borrows from the markets to fund shortfall in revenue over expenditure. Gross market borrowing for the current financial year is pegged at Rs 15.43 lakh crore, which is the highest ever. The finance minister has proposed to bring it down to Rs 14.13 lakh crore in 2024-25,according to information.