The Government of India plans to raise Rs 8.88 lakh crore through market borrowing in the first half of the upcoming fiscal year 2023-24 (April-September). The borrowing will fund the revenue gap for pushing economic growth, the Finance Ministry said in a statement. Out of the gross market borrowing of Rs 15.43 lakh crore estimated for FY 2023-24, 57.5 per cent, or a sum of Rs 8.88 lakh crore will be borrowed in the first half, the statement said. The borrowing is scheduled to be completed in 26 weekly tranches of Rs 31,000-39,000 crore and will be spread across 3, 5, 7, 10, 14, 30 and 40-year securities, it added.
Finance Minister Nirmala Sitharaman had, in the Budget speech, shown the government’s intention towards a continued move on the path of fiscal consolidation, with a budgeted fiscal deficit of 5.9 per cent in FY24. This was reduced from 6.4 per cent in the current financial year. She had said that the central government has pegged the gross borrowing at Rs 15.4 lakh crore to fund its fiscal deficit of 5.9 per cent for FY24. The overall borrowing of the government is lower than Rs 15.8 lakh crore as estimated in a Bloomberg survey, but higher than Rs 14.2 lakh crore budgeted for FY23.
Now to finance the fiscal deficit in 2023-24, at the net level, the government borrowing is estimated at Rs 11.8 lakh crore. “The share of borrowing under different maturities will be 3 years (6.31 per cent), 5 years (11.71 per cent), 7 years (10.25 per cent), 10 years (20.50 per cent), 14 years (17.57 per cent), 30 years (16.10 per cent) and 40 years (17.57 per cent),” the statement said. The issuance of Sovereign Green Bonds will be announced in the second half (H2) of FY 2023-24, it added.
The finance ministry statement maintained that the government will continue to exercise the green-shoe option to retain an additional subscription of up to Rs 2,000 crore against each of the securities indicated in the auction notification.
The RBI will also conduct switches of dated securities through auctions on the third Monday of every month or at more frequent intervals. In case the third Monday is a holiday, the switch auction will be conducted on the fourth Monday of the month, the statement said. Further, the government will borrow a significantly lower amount through issuance of Treasury Bills in the first quarter (Q1) of FY 2023-24. It aims to borrow Rs 1.42 lakh crore during the quarter against a net borrowing of Rs 2.40 lakh crore in Q1 of FY 2022-23.
