Centre to borrow 57.55% of its full-year target in H1FY24: FinMin

The central government will borrow 57.55 per cent of its full-year target in the first half (April-September) of the approaching fiscal year (2023-24, or FY24), thereby frontloading its borrowing programme for FY24.

However, this will be lower than the borrowing in the first six months of 2022-23 (FY23) at 59 per cent of the full-year target.

The norm has been to borrow 60-63 per cent in the past few years.

“Of the gross market borrowing of Rs 15.43 trillion projected for FY24 in the Union Budget, Rs 8.88 trillion (57.55 per cent) is planned to be borrowed in the first half (H1),” the Ministry of Finance said in a statement.

“The H1 gross borrowing is less front-ended than earlier years, given the spike in redemptions in H2. With this, the net borrowing will be less unevenly split between the two halves,” said Aditi Nayar, chief economist, ICRA.

The government borrowing programme is scheduled to be completed in 26 weekly tranches of Rs 31,000-39,000 crore each.

The borrowing will be spread over three-, five-, seven-, 10-, 14-, 30-, and 40-year securities.

The share of borrowing under different maturities will be three-year (6.31 per cent), five-year (11.71 per cent), seven-year (10.25 per cent), 10-year (20.5 per cent), 14-year (17.57 per cent), 30-year (16.1 per cent), and 40-year (17.57 per cent).

However, the finance ministry said the issuance of sovereign green bonds (SGBs) will be announced in the second half (H2) of FY24. In FY23, the government auctioned SGBs in H2 of the fiscal year.

“To take care of temporary mismatches in government accounts, the Reserve Bank of India has fixed the ways and mean advances limit for H1FY24 at Rs 1,50,000 crore,” the finance ministry said.

In her latest Budget, Finance Minister Nirmala Sitharaman has projected to bring down the Centre’s fiscal deficit to 5.9 per cent of gross domestic product (GDP) in FY24, from 6.4 per cent of GDP in FY23.