The government will borrow from markets about Rs 3.72 lakh crore in the first half of next fiscal beginning April which is 64 per cent of the borrowing target for full financial year. The borrowing in the April-September period will be a little higher compared to other years as the finance ministry and the RBI foresee other ministries to start spending from the beginning of the fiscal as well as redemption pressure.
“Normally every year we borrow 60-62 per cent in the first half of the year, this year it is marginally higher 64 per cent,” Economic Affairs Secretary Shaktikanta Das told reporters here. “90 per cent of the total redemptions (due next year) will happen in the first half. Budget has been passed and money will be available fully from the beginning of the year and considering the revenue inflows and other receipts, the group has decided that of total gross borrowing, 64 per cent is Rs 3.72 lakh crore,” Das said.
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To finance the fiscal deficit of 3.2 per cent of GDP for 2017-18, the Budget had pegged gross borrowing at Rs 5.8 lakh crore and net borrowing at Rs 4.25 lakh crore.
Total redemptions of Rs 1.57 lakh crore are due next year of which 90 per cent will be redeemed in the first half. “The focus in planning the open market borrowing is to elongate the maturity profile and also to undertake it in the most non-disruptive manner,” Das said.
Besides, the ministry and RBI has decided to elongate the maturity profile of government securities beginning next year.
At the moment the maturity profile of all GSecs is about 10.5 years. “The next year’s GSecs which are going to be auctioned will have a maturity profile of 14.7 years,” Das said.