The Finance Ministry, in consultation with the Reserve Bank of India (RBI), decided to borrow ₹8.20 lakh crore through dated securities during the April-September period of fiscal year 2026-27.
This is 51% of the total borrowing of ₹16.09 lakh crore and is lower than the normal 60 per cent plus during the first half.
DK Pant, Chief Economist at India Ratings & Research, said that borrowing has slowed because the 10-year bond yield is above 6.9% and global conditions remain highly uncertain.
According to the Finance Ministry, after the Budget was presented, the government carried out switches of government securities, which helped reduce total market borrowing to ₹16.09 lakh crore. Out of this, ₹8.20 lakh crore is planned to be raised in the first half of the year through long-term bonds, including ₹15,000 crore through sovereign green bonds.
The government plans to complete its borrowing through 26 weekly auctions, spread across securities with maturities ranging from 3 to 50 years. The borrowing is distributed across different tenures to balance short- and long-term needs.
Out of the total borrowing:
- 3-year bonds: 8.1%
- 5-year bonds: 15.4%
- 7-year bonds: 8.1%
- 10-year bonds: 29% (largest share)
- 15-year bonds: 14.5%
- 30-year bonds: 7.3%
- 40-year bonds: 8%
- 50-year bonds: 9.6%
Treasury bills:
The government said it may switch or buy back some bonds to better manage repayment pressure in the future. It also reserves the right to use the “greenshoe option,” allowing it to raise up to ₹2,000 crore more than the planned amount in each auction if demand is strong.
The government will also borrow through Treasury Bills (T-Bills) on a weekly basis in the first quarter of FY27. It plans to raise ₹24,000 crore every week for 12 weeks.
This includes:
- ₹12,000 crore through 91-day T-Bills
- ₹6,000 crore through 182-day T-Bills
- ₹6,000 crore through 364-day T-Bills
It is important to note that long-term government bonds (with maturity of more than one year) pay regular interest, known as a coupon. However, Treasury Bills (T-Bills) do not pay any interest. Instead, they are issued at a lower price (discount) and redeemed at full face value, with the difference acting as the investor’s return.
To take care of temporary mismatches in government accounts, the RBI has fixed the ways and mean advances (WMA) limit for H1 of FY27 at ₹2.50 lakh crore, according to the statement.
Source: thehindubusinessline
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