As the global uncertainties continue, the challenges for market borrowings are expected to persist notwithstanding the lower size of the budgeted fiscal deficit of the centre, the Reserve Bank of India said in its annual report for FY23.

In the Budget 2023-24, the gross market borrowing through dated securities for 2023-24 is budgeted at ₹15,43,000 crore compared with ₹14,21,000 crore in 2022-23 (RE).

Net market borrowing (including T-bills) is budgeted at ₹12,30,911 crore, financing 68.89 per cent of gross fiscal deficit (GFD) in 2023-24.

The fiscal deficit is estimated to be 5.9 per cent of GDP, per FY24 Budget. The RE of the fiscal deficit for FY23 is 6.4 per cent of GDP.

According to the central bank, it is crucial to maintain ongoing fiscal consolidation efforts in order to rebuild policy buffers and ensure long-term debt sustainability. Continued thrust on digitisation could aid in greater formalisation of the economy and thereby higher tax base, generating the necessary resources to undertake developmental expenditure.

The RBI said it proposes to conduct the market borrowing programme by consolidating debt through calendar-driven, auction-based switch operations along with re-issuance of securities to augment liquidity in the G-Sec market and facilitate fresh issuances.

Retail direct scheme

The central bank plans to develop a mobile application for improving the ease of access of G-Secs for retail investors under the ‘Retail Direct Scheme’.

It also plans to take appropriate measures for enhancing retail investor awareness about the RBI ‘Retail Direct Scheme’;