New Delhi, Sep 25 (PTI) The Union government will raise Rs 7.86 lakh crore from securities in the second half of this fiscal year, reducing the total borrowing for the current financial year by a whopping Rs 1,20,494 crore despite global headwinds.
The reduction in total borrowing indicates the government’s commitment to fiscal prudence.
A senior finance ministry official said the reduction is mainly due to switching G-secs maturing in 2026-27 of Rs 1,14,286 crore, a conscious debt-management strategy of the Government of India.
“During 2026-27, the Government of India is expected to have market borrowing of Rs 15,99,506 crore through dated securities, as compared to Budget Estimates of Rs 17,20,000 crore for the ongoing financial year,” the Finance Ministry said in a statement.
“The Government of India, in consultation with the Reserve Bank of India (RBI), has decided to borrow Rs 7,86,000 crore in the second half (H2) of FY 2026-27. This includes Sovereign Green Bonds (SGrBs) issuance of Rs 15,000 crore,” it said.
During the first half ending this month, the government would mobilise Rs 8,13,506 crore from bonds, slightly lower than the target of Rs 8.2 lakh crore, to fund the revenue gap.
Finance Minister Nirmala Sitharaman in the Budget presented on February 1 had proposed to borrow Rs 17.2 lakh crore to fund its fiscal deficit projected at 4.3 per cent of the GDP.
In absolute terms, the fiscal deficit is pegged at Rs 16.9 lakh crore for 2026-27.
“To finance the fiscal deficit, the net market borrowings from dated securities are estimated at Rs 11.7 lakh crore. The balance financing is expected to come from small savings and other sources. The gross market borrowings are estimated at Rs 17.2 lakh crore,” she had said while delivering the Budget 2026-27.
According to sources in the finance ministry, the net market borrowings (market borrowings for fiscal deficit financing) are kept at the budget levels, implying that inspite of the incipient fiscal pressures, the government is committed to the path of fiscal prudence laid out in the budget.
The focus on the long end will help the government increase the Weighted Average Maturity (WAM) which had fallen during H1, sources said, a longer WAM will help reduce the roll-over risk.
The government is managing its debt in the most prudent manner by resorting to switches/buybacks etc and is aiding the market by not adding any additional pressure, they said.
The statement further said that the gross market borrowing of Rs 7,86,000 crore in the second half of FY27 would be completed through 23 weekly auctions.
The market borrowing will be spread across securities with tenors of 3 years, 5 years, 7 years, 10 years, 15 years, 30 years, 40 years and 50 years, it said.
The share of borrowing (including SGrBs) under different maturities will be 3-year (6.9 per cent), 5-year (12.1 per cent), 7-year (9.1 per cent), 10-year (26.3 per cent), 15-year (17.6 per cent), 30-year (9.2 per cent), 40-year (8.9 per cent) and 50-year (9.9 per cent), it said.
To smooth the redemption profile, the government will continue to carry out switching/buyback of securities.
The Government will continue to reserve the right to exercise the greenshoe option to retain an additional subscription of up to Rs 2,000 crore against each of the securities indicated in the auction notifications, it said.
During the third quarter of FY27, it said, the government is expected to borrow Rs 23,000 crore per week in 13 auction weeks through issuance of Treasury Bills (T-Bills).
The break-up would be Rs 8,000 crore under 91-day T-Bills, Rs 8,000 crore under 182-day T-Bills and Rs 7,000 crore under 364-day T-Bills.
To address temporary mismatches in government accounts, if any, RBI has fixed the Ways and Means Advances (WMA) limit for H2 of the current financial year at Rs 50,000 crore, it added.
All auctions covered by the calendar will have the facility of non-competitive bidding, under which five per cent of the notified amount will be reserved for specified retail investors, it said.
Like in the past, it said, the government, in consultation with the RBI, will continue to have the flexibility to bring about modifications in the above calendar in terms of notified amount, issuance period, maturities, etc. and to issue different types of instruments, including instruments having non-standard maturity, floating rate bonds (FRBs), inflation-indexed bonds (IIBs), depending upon the requirement, evolving market conditions and other relevant factors, after giving due notice to the market.
The calendar is subject to change, if circumstances so warrant, including for reasons such as intervening holidays, it said.
Meanwhile, RBI has issued a detailed weekly schedule for borrowing from bonds. PTI DP MR
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