Centre maintains borrowing target, will raise Rs 6.61 lakh crore in second half of FY25

NEW DELHI: The Center on Thursday announced that it has maintained its borrowing goal for the current financial year and will sell bonds worth Rs 6.61 lakh crore between October and March. The borrowing for the second half will be done through bonds with various maturities, ranging from three to 50 years.
This includes the issuance of green bonds worth 200 billion rupees, which will be completed through 21 weekly auctions.
The three-year, five-year, and seven-year bonds will make up a combined 23.50% of the total borrowing, while the 10-year and 15-year bonds will constitute 24.8% and 13.2%, respectively. The 30-year and 40-year bonds will account for 12.1% and 15.9% of the borrowing, and the 50-year bonds will make up 10.6%.
“Out of Gross Market borrowing of Rs 14.01 lakh crore budgeted for 2024-25, Rs 6.61 lakh crore (47.2 per cent) is planned to be borrowed in H2 through issuance of dated securities, including Rs 20,000 crore of Sovereign Green Bonds (SGrBs),” the finance ministry said.
The government will carry out switching/buyback of securities to smoothen the redemption profile, it said. It will also maintain the right to exercise the greenshoe option, allowing it to retain an additional subscription of up to Rs 2,000 crore against each of the securities specified in the auction notifications.
Meanwhile, weekly borrowing through the issuance of Treasury Bills is expected to be Rs 19,000 crore for 13 weeks in the third quarter of 2024-25, with the issuance of Rs 7,000 crore under 91 dated treasury bills (DTBs), Rs 6,000 crore under 182 DTBs, and Rs 6,000 crore under 364 DTBs.
To address temporary mismatches in government accounts, the Reserve Bank of India has set the Ways and Means Advances (WMA) limit for the second half of FY 2024-25 at Rs 50,000 crore.
Additionally, the government has already raised Rs 7.4 lakh crore, which constitutes 52.8 per cent of the total estimated gross market borrowing of Rs 14.01 lakh crore for the fiscal year 2024-25, in the first half of the year.
Earlier, the finance minister Nirmala Sitharaman had initially proposed a gross borrowing of Rs 14.13 lakh crore through the issuance of dated securities to address the revenue shortfall in the upcoming financial year in the interim budget. However, in the final Budget presented in July, she reduced the gross borrowing estimate by Rs 12,000 crore, attributing it to strong revenue collection.
The gross borrowing for FY25 is lower compared to the previous year’s estimate of Rs 15.43 lakh crore, which was the highest ever recorded.
“The gross and net market borrowings through dated securities during 2024-25 are estimated at Rs 14.01 lakh crore and Rs 11.63 lakh crore respectively. Both will be less than that in 2023-24,” said Sitharaman.