The Finance Ministry announced on Thursday that the government will raise Rs 8 lakh crore from the bond market during the first half of of the next financial year (April-September), which is 54 per cent of the total market borrowing of Rs 14.82 lakh crore for the entire financial year announced in the Budget 2025-26.
Out of this, Rs 10,000 crore will be raised through sovereign green bonds in the first half of the next fiscal.
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The borrowing will be conducted through 26 weekly auctions, with securities maturing between 3 and 50 years. The spread across various maturities that has been planned includes 3, 5, 7, 10, 15, 30, 40, and 50-year government securities.
To smoothen the redemption profile, the Centre will conduct security buybacks and switching operations, while the Reserve Bank of India has set the Ways and Means Advances limit at Rs 1.50 lakh crore for the first half of the financial year to manage temporary mismatches in government accounts.
In addition, the government plans to borrow Rs 19,000 crore weekly via Treasury bills in the first quarter of 2025-26, with over 26 per cent of the total market borrowings to be raised through 10-year government securities.
The Centre will continue to reserve the right to exercise a greenshoe option to retain an additional subscription of up to Rs 2,000 crore against each of the securities that it plans to issue.
The Centre’s gross borrowing for 2025-26 is higher than the current financial year, since it includes repayment of Covid-19 related loans, which will become due during the financial year.
The gross borrowing for 2024-25 is pegged at Rs 14.01 lakh crore.
In net terms, however, borrowings through the bond market have been estimated at Rs 11.54 lakh crore (3.2 percent of GDP) for 2025-26 compared with Rs 11.63 lakh crore in 2024-25.
The Centre plans its market borrowings in a phased manner so that liquidity is not squeezed out for investments in the corporate sector, which would hurt economic growth.
