Govt announces borrowings of Rs 8 trillion in the first half of FY26

The government on Thursday announced plans to borrow ₹8 trillion from the market in the first half (H1) of 2025-26 (FY26), accounting for around 54 per cent of the total gross market borrowing target of ₹14.82 trillion. This includes the issuance of ₹10,000 crore in sovereign green bonds (SGBs).

 

The gross market borrowing of ₹8 trillion will be completed through 26 weekly auctions.

 

“The amount is slightly lower than expected; we were expecting somewhere around ₹8.4 trillion,” said a dealer at a primary dealership. “This might lead to a softening of around 2 basis points in the yield on the benchmark bond,” said a market participant.

 

 

While releasing the calendar for the issuance of Government of India (GoI)-dated securities, the finance ministry said market borrowing would be spread across three-, five-, seven-, 10-, 15-, 30-, 40-, and 50-year securities.

 

The share of borrowing, including SGBs, under different maturities will be: three-year (5.3 per cent), five-year (11.3 per cent), seven-year (8.2 per cent), 10-year (26.2 per cent), 15-year (14 per cent), 30-year (10.5 per cent), 40-year (14 per cent), and 50-year (10.5 per cent).

 

Market participants noted that the 26 per cent allocation to 10-year government securities was higher than expected.

 

“The 10-year will be allocated every fifth week instead of the third week; that’s likely why they increased the amount,” said the treasury head at a private bank.

 

The finance ministry said, “As before, all auctions covered by the calendar will have a facility for non-competitive bidding, under which 5 per cent of the notified amount will be reserved for specified retail investors.”

 

Weekly borrowing through the issuance of treasury bills (T-bills) in the April-June quarter of FY26 is expected to be ₹19,000 crore for 13 weeks, comprising ₹9,000 crore in 91-day T-bills, ₹5,000 crore in 182-day T-bills, and ₹5,000 crore in 364-day T-bills.

 

To manage temporary mismatches in government accounts, the Reserve Bank of India (RBI) has set the Ways and Means Advances limit for H1FY26 at ₹1.5 trillion.

 

“GoI, in consultation with the RBI, reserves the right to exercise the greenshoe option to retain additional subscriptions of up to ₹2,000 crore against each of the securities indicated in the auction notifications,” the finance ministry said in a statement.

 

The government has set a fiscal deficit target of 4.4 per cent for FY26.

 

(Additional inputs by Anjali Kumari)