Government Plans to Secure Rs 8 Lakh Crore Through Bonds in April-September
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Synopsis
The Finance Ministry has announced plans to borrow Rs 8 lakh crore in the bond market during April-September 2025-26, representing 54% of total market borrowing for the fiscal year. Rs 10,000 crore will be raised through green bonds, while various securities will be auctioned to manage liquidity and support economic growth.
Key Takeaways
- The government aims to borrow Rs 8 lakh crore in the first half of 2025-26.
- 54 percent of the total borrowing is planned for this period.
- Rs 10,000 crore will be raised through green bonds.
- 26 weekly auctions will be held for various securities.
- The Reserve Bank of India will assist in managing liquidity.
New Delhi, March 27 (NationPress) The Finance Ministry revealed on Thursday that the government intends to raise Rs 8 lakh crore from the bond market during the initial half of the upcoming financial year (April-September). This figure represents 54 percent of the total market borrowing of Rs 14.82 lakh crore for the entire financial year as outlined in the Budget 2025-26.
Of this amount, Rs 10,000 crore will be sourced through sovereign green bonds in the first half of the next fiscal year.
The borrowing process will take place through 26 weekly auctions, featuring securities maturing in a range from 3 to 50 years. The planned distribution across various maturities includes 3, 5, 7, 10, 15, 30, 40, and 50-year government securities.
To enhance the redemption profile, the Centre will implement security buybacks and switching operations. Additionally, the Reserve Bank of India has established the Ways and Means Advances limit at Rs 1.50 lakh crore for the first half of the financial year to manage temporary discrepancies in government accounts.
Moreover, the government aims to borrow Rs 19,000 crore weekly via Treasury bills in the first quarter of 2025-26, with more than 26 percent of the total market borrowings to be raised through 10-year government securities.
The Centre reserves the right to exercise a greenshoe option to retain an additional subscription of up to Rs 2,000 crore against each of the securities it plans to issue.
The Centre's gross borrowing for 2025-26 exceeds that of the current financial year, as it includes the repayment of Covid-19 related loans due during the financial year.
The gross borrowing for 2024-25 is estimated at Rs 14.01 lakh crore.
In net terms, borrowings through the bond market are projected at Rs 11.54 lakh crore (3.2 percent of GDP) for 2025-26, compared to Rs 11.63 lakh crore in 2024-25.
The Centre strategically plans its market borrowings to ensure that liquidity is maintained for investments in the corporate sector, which is essential for economic growth.
