India’s government will maintain its budgeted borrowing programme for the ongoing financial year, and will sell bonds worth 6.61 trillion rupees (S$101.6 billion) from October through March, it said on Thursday (Sep 26).
The government had projected gross market borrowing of 14.01 trillion rupees for the April-March financial year in July. Of this, 7.40 billion rupees were scheduled in the first half of the year.
Borrowing for the second half will be conducted through bonds with maturities of three, five, seven, 10, 15, 30, 40 and 50 years, the government said.
This includes green bonds worth 200 billion rupees, with plans to complete the borrowing via 21 weekly auctions.
The three-year, five-year and seven-year bonds will constitute a combine of 23.50 per cent of total borrowing, while the 10-year and 15-year bonds would constitute 24.8 per cent and 13.2 per cent respectively.
The share of 30-year and 40-year bonds would be at 12.1 per cent and 15.9 per cent, while that of 50-year bonds would be 10.6 per cent.
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The government increased borrowings to fund its record social spending during the Covid-19 pandemic, causing its fiscal deficit to widen to as much as 9.17 per cent of gross domestic product in fiscal year 2021.
The deficit has been on a downward trajectory since, and New Delhi has set a target of 4.9 per cent for the current year.
Bond yields had declined earlier in the day as some market participants were expecting a cut in the borrowing. The benchmark 10-year yield ended at 6.7178 per cent, its lowest since Feb 21, 2022.
Separately, the government will gross borrow 2.47 trillion rupees through treasury bills, which have maximum tenure of 364 days.
The government will sell 190 billion rupees of treasury bills every week, and this includes 70 billion rupees of 91-day papers, and 60 billion rupees each of 182-day and 364-day notes.
Additionally, the Reserve Bank of India has fixed the Ways and Mean Advances – temporary advances given by the central bank to the government to tide over financing gaps – at 500 billion rupees for the Oct-March period, the government said. REUTERS
