Thu Sep 26 14:17:18 UTC 2024: ## India’s Government Finalizes Borrowing Plan for Second Half of Fiscal Year 2024-25
The Indian government has announced its borrowing program for the second half of the fiscal year 2024-25, totaling Rs 6.61 lakh crore. This figure is in line with the projected target for the latter half of the fiscal year.
The government plans to borrow over Rs 7 lakh crore in the first six months of the year, with nearly 40% of this amount secured through long-term bonds. The next quarter will see 21 auctions, beginning on September 30th, with the government offering Rs 39,000 crore worth of bonds, including Rs 22,000 crore for 10-year bonds and Rs 10,000 crore for 50-year securities.
The government will borrow across various maturities, including 3, 5, 7, 10, 15, 30, 40, and 50-year securities. The share of borrowing under different maturities has been outlined, with 10-year bonds making up the largest portion (24.8%). To manage the redemption profile, the government will carry out switching/buyback of securities.
In addition to bond issuance, the government will also issue weekly treasury bills totaling Rs 19,000 crore over 13 weeks.
Aditi Nayar, Chief Economist at ICRA, commented that the government’s borrowing figure for the second half of the fiscal year aligns with ICRA’s expectations. However, a sharp decline in redemptions would result in a significant increase in net borrowings. Despite this, ICRA expects the government’s fiscal deficit to remain within or slightly below the budget estimate, suggesting that the announced borrowing level for the second half of the fiscal year is likely to be sufficient.
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