On Wednesday, the Finance Ministry announced that the government plans to raise Rs 8.88 lakh crore in the first half (April-September) of 2023-24 through borrowing to finance the revenue gap and promote economic growth.
According to an official statement, out of the estimated gross market borrowing of Rs 15.43 lakh crore for the fiscal year 2023-24, 57.5% or Rs 8.88 lakh crore will be borrowed in the first half of the year (H1). The borrowing will be carried out over 26 weekly tranches, ranging from Rs 31,000 to Rs 39,000 crore. The borrowing will be spread across various securities with maturities of 3, 5, 7, 10, 14, 30, and 40 years, as per the statement.
According to a government statement, the borrowing will be divided among different maturity periods as follows: 3-year (6.31%), 5-year (11.71%), 7-year (10.25%), 10-year (20.50%), 14-year (17.57%), 30-year (16.10%), and 40-year (17.57%).
Due to the pandemic, the Indian government has seen an increase in social spending on free food and subsidies, resulting in a record-high level of spending. As a result, the government’s borrowing has more than doubled from the levels seen in 2019, when Prime Minister Narendra Modi was re-elected.
As per the government’s statement, they are planning to borrow Rs 4.16 lakh crore through treasury bills in the June quarter. Furthermore, there will be no new government green bonds issued in the first half of the financial year, and these bonds may be issued in the second half instead.
The government also mentioned that it intends to exercise the greenshoe option to retain additional subscriptions of up to Rs 2,000 crore for each of the securities indicated in the auction notification.
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