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With nodal Ministries having more funds to spend due to the advancement of the Union Budget as well as higher redemption pressure, the Centre plans to borrow ₹3.72 lakh crore or 64 per cent of its gross borrowing estimate in the first half of 2017-18.
“The Budget is fully passed and the entire expenditure is available to Ministries for spending from April 1,” said Economic Affairs Secretary Shaktikanta Das on Tuesday after a meeting of the cash and debt management monitoring group to finalise the Centre’s market borrowing roadmap in the first six months of the new fiscal.
Though he did not give a figure for net borrowings, but taking in redemptions, this would amount to net market borrowing of about ₹2.31 lakh crore between April and September 2017.
Total redemptions of ₹1.57 lakh crore are estimated to be made in 2017-18, of which 90 per cent would be in the first half, said Das.
The Union Budget 2017-18 had pegged the Centre’s gross borrowing target at ₹5.8 lakh crore and net borrowings at ₹4.25 lakh crore. Buybacks of ₹75,000 crore are also planned in the next fiscal. Due to the higher redemptions, the ways and means advance has been increased to ₹60,000 crore in the first half of the fiscal as compared to ₹50,000 crore in the same period this fiscal.
Outlining the market borrowing programme, Das said that in all 24 auctions would be conducted by the RBI. In most weeks, the government would seek to raise ₹15,000 crore through each auction.
But four weekly auctions – one in April, two in July and one in August would raise ₹18,000 crore each.
With higher expenditure needs, Das said that the focus would be to elongate the maturity profile of government borrowings in 2017-18.
The average maturity of the government securities to be issued next fiscal are also expected to be higher at 14.7 years, as against the average maturity profile of 10.5 years of the paper issued this fiscal.
The maturity of the securities would be in the range of five to nine years, 10 years to 14 years, 15 years to 19 years and 20 years and above.
T-Bills plan The Centre would also issue treasury bills worth ₹26,000 crore in the first half of the fiscal.
Das said that no decision was taken on the issuance of sovereign gold bonds. “We will notify it as and when we decide to issue the bonds,” he said.
The Centre has targeted a fiscal deficit of 3.2 per cent of the GDP in 2017-18 and the market borrowings will help finance a part of it.
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