The Finance Ministry on Wednesday said the government will borrow ₹8.80 lakh crore through dated securities during April-September (H1) period of fiscal year 2023-24. It is 57.5 per cent of gross borrowing of ₹15.43 lakh crore for the full fiscal. Also, it is less than previous years, where 60 per cent or more used to be borrowed during first six months.

Less than average borrowing means more funds will be available for private sector to borrow. Also, as Devendra Kumar Pant, Chief Economist with India Ratings, say the government expects inflation to come down which in turn will push down bond yield. This could result in lowering the borrowing cost in second half.

Borrowing schedule

According to a Finance Ministry statement, the borrowing is scheduled to be completed in 26 weekly tranches of ₹31,000-39,000 crore. The borrowing will be spread under 3, 5, 7, 10,14,30 and 40-year securities. The share of borrowing under different maturities will be: 3 year (6.31 per cent), 5 year (11.71 per cent), 7 year (10.25 per cent), 10 year (20.50 per cent), 14 year (17.57 per cent), 30 year (16.10 per cent) and 40 year (17.57 per cent). “The issuance of Sovereign Green Bonds will be announced in the second half (H2) of FY 2023-24,” the statement said.

Further, the government will continue to carry out switch operations to smoothen the redemption profile. It will continue to exercise green-shoe option to retain an additional subscription of up to ₹2,000 crore against each of the securities indicated in the auction notification.

Weekly borrowing through issuance of Treasury Bills in the first quarter (Q1) of FY 2023-24 is expected to be ₹32,000 crore with net borrowing of ₹1.42-lakh crore during the quarter, against net borrowing of ₹2.40-lakh crore in Q1 of FY 2022-23. There will be issuance of ₹12,000 crore under 91-day Treasury Bills (DTBs), ₹12,000 crore under 182 DTBs and ₹8,000 crore under 364 DTBs through each weekly auction to be conducted during the quarter.

“To take care of temporary mismatches in government account, the Reserve Bank of India has fixed the Ways and Mean Advances (WMA) limit for H1 of FY 2023-24 at ₹1,50,000 crore,” added the statement.