The Centre will raise Rs 8.2 lakh crore, or 51% of the revised annual gross borrowing target of Rs 16.09 lakh crore, from the market in the first half of 2026-27, including Rs 15,000 crore through sovereign green bonds.
The H1FY27 share in annual borrowings is lower than in recent years; it was 54% in H1FY26.
Easing the Pressure
“The GMB programme for H1 FY2027 is less front-loaded than that seen in recent years, which may help to cool the recent spike in yields,” ICRA chief economist Aditi Nayar said, adding that this is accompanied by a higher Ways and Means Advances (WMA) limit.
To manage temporary mismatches, the RBI has set the WMA limit for H1FY27 at Rs 2.5 lakh crore, up from Rs 1.5 lakh crore a year ago.
The yield on 10-year government securities rose to 6.92% on Friday, the highest in nearly two years. “Yields would likely ease once the West Asia conflict resolves, and it would be prudent to defer some borrowings until then, although the timelines for the same remain uncertain,” Nayar said.
Government borrowing figures came in better than expected, said Gopal Tripathi, treasury head at Jana Small Finance Bank. “The market had anticipated around Rs 8.5-9 lakh crore. This would provide a slight relief to the market in the current environment,” Tripathi said.
The government also announced Treasury Bill issuances of Rs 2.88 lakh crore for the quarter ending June 2026.
Gross market borrowing through dated securities for FY27 was pegged at Rs 17.2 lakh crore in the Budget, but switches of around Rs 1 lakh crore have brought it down to Rs 16.09 lakh crore.
Maturity Profile
The H1 borrowing of Rs 8.2 lakh crore will be completed through 26 weekly auctions across maturities ranging from 3 to 50 years. Of the total, 10-year bonds will account for Rs 2.38 lakh crore (29%), followed by 15-year bonds at Rs 1.19 lakh crore (14.5%), 30-year bonds at Rs 45,000 crore (5.5%), 40-year bonds at Rs 66,000 crore (8%) and 50-year bonds at Rs 79,000 crore (9.6%).
The government will continue switching and buyback operations to smooth the redemption profile and retain the option to exercise a greenshoe option of up to Rs 2,000 crore for each security. Weekly T-Bill borrowing in Q1FY27 is set at Rs 24,000 crore, comprising Rs 12,000 crore of 91-day, and Rs 6,000 crore each of 182-day and 364-day T-Bills.