The Central government will borrow around ₹5.03 lakh crore from the market for the second half of the financial year ending March 2022 (FY22).
The government, in consultation with the Reserve Bank of India (RBI), has finalised its borrowing programme for the H2 (October 2021 to March 2022) of FY22.
The Budget has pegged fiscal deficit at 6.8 per cent for the next fiscal, down from 9.5 per cent of the GDP in the current financial year.
The projection for second half borrowing figure, the government said, also factors requirements for release of balance amount to states on account of back-to-back loan facility in-lieu of GST compensation during the year.
The government said, out of the budgeted borrowing figure of ₹7.24 lakh crore in the first half (H1), around ₹7.02 lakh crore was completed. The government in the Budget aimed to borrow a total amount of ₹12.05 lakh crore for the full financial year.
"Borrowing in H1 has been completed smoothly with weighted average yield at 6.19 % and weighted average maturity at 16.69 years. In H1, good demand for government bonds was seen from all major investor segments and the yields have remained stable," the ministry of finance said in a release.
The government’s second half borrowing is likely to be conducted in 21 weekly tranches of ₹23,000-24,000 crore. It will be spread under 2, 5, 10, 14, 30 and 40 year-securities and Floating Rate Bonds (tenor of 7-8 and 13 years).
The RBI said that the limit for Ways and Means Advances (WMA) for the second half of FY22 has been fixed at ₹50,000 crore.
The government said it will continue to carry out switching of securities to smoothen redemptions in coming years.
The share of borrowing under different maturities will be: 2 years - 4%; 5 years - 11.9 %; 10 year - 28.4 %; 14 year - 17.9 %; 30 year - 13.9 % and 40 year - 15.1 %.
Borrowing under floating rate bonds will be 8.8 %. The government will issue another floating rate bond of 7-8 years, in addition to 13-year. Both will be issued on alternate basis.
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