Government’s Borrowing Strategy for FY 2023–24’s First Half
The government borrowing plan for FY 2023–24’s first half (H1) has been finalized by the Indian government in cooperation with the Reserve Bank of India.
Out of the gross market borrowing of Rs 15.43 trillion proposed in the Union budget for FY 2023–24, Rs 8.88 trillion (or 57.55%) is intended to be borrowed in the first half (H1).
The debt will be repaid in 26 weekly installments ranging from 31,000 to 39,000 crores. The debt will be distributed across securities with maturities of 3, 5, 7, 10, 14, and 30 years. Three years (6.31%), five years (11.71%), seven years (10.25%), ten years (20.50%), fourteen years (17.57%), thirty years (16.10%), and forty years (17.57%) will each have a different percentage of borrowing.
The second half (H2) of FY 2023–24 will see the announcement of the issue of sovereign green bonds.
To improve the redemption profile, the government will keep doing switch operations.
To retain an additional subscription of up to Rs 2,000 crore against each of the securities included in the auction notification, the government would continue to use its greenshoe option.
The first quarter (Q1) of FY 2023–24 is likely to see weekly government borrowing through the issuing of Treasury Bills of Rs 32,000 crore, with net borrowing of Rs 1.42 lakh crore for the quarter, compared to net borrowing of Rs 2.40 lakh crore in Q1 of FY 2022–23.
Through each weekly auction that will be held throughout the quarter, Rs 12,000 crore under 91 DTBs, Rs 12,000 crore under 182 DTBs, and Rs 8,000 crore under 364 DTBs would be issued.
The Central Bank of India set the Ways and Mean Advances (WMA) ceiling for H1 of FY 2023–24 at Rs. 1,50,000 crore to address short-term discrepancies in the Government Account.
Sources: www.rbi.org.in
