Government to Borrow Rs.8.45 Lakh Crore in First Half of FY-23

The Central Government will borrow 8.45 lakh crore in the first half of financial 2022-23, mentioned in an official statement issued by the Finance Ministry on Thursday

The ministry said that of the 14.31 lakh crore in gross market borrowing estimated for FY23, 8.45 lakh crore is planned to be borrowed in the first half.

“The loan will be paid off in 26 weekly instalments of 32,000-33,000 crore. The borrowing will be spread across securities with maturities of 2, 5, 7, 10, 14, 30, and 40 years, as well as Floating Rate Bonds with varying tenors. The following maturities will have a higher share of borrowing: 2 years (6.15 percent), 5 years (13.85 percent), 7 years (10.77 percent), 10 years (20 percent), 14 years (15.98 percent), 30 years (13.25 percent), 40 years (13.85 percent), and FRBs (6.15 percent ). FRBs of various tenors will be issued every two weeks” It stated.

On February 1, Finance Minister Nirmala Sitharaman unveiled a 39.45 lakh crore spending plan for the coming financial year, maintaining a larger-than-expected financial deficit in order to drive economic growth.

The government stated that it will continue to switch securities to smooth out redemptions and that it may exercise the greenshoe option to retain an additional subscription of up to 2,000 crore against each of the securities listed in the auction notification.

The weekly borrowing under treasury bills is expected to be 33,000-34,000 crore in the first quarter (Q1) of FY23, with a net borrowing of 2.40 lakh crore during the quarter. Each auction held during the quarter will see the issuance of 13,000 crore under 91 DTBs, 12,000-13,000 crore under 182 DTBs, and 8,000 crore under 364 DTBs.

The RBI has set the Ways and Mean Advances (WMA) limit for H1 of FY 2022-23 at 1,50,000 crore to address temporary mismatches in government accounts.

The government also stated that it is collaborating with the RBI to develop a framework for the issuance of sovereign green bonds, as announced by the finance minister in the Budget. Once the preliminary work is completed, the issuance of green Bonds will be announced.