- Government keeps FY27 borrowing below Budget estimate at Rs 15.99 lakh crore
- Second half FY27 borrowing planned at Rs 7.86 lakh crore through bonds
- Focus on longer-maturity securities to spread repayment and reduce risks
The government remains committed to fiscal prudence despite emerging fiscal pressures, with its FY27 market borrowing programme kept below the Budget estimate, Finance Ministry sources said.
The Centre plans to borrow Rs 7.86 lakh crore through bonds in the second half of FY27, taking the full-year gross market borrowing programme to Rs 15.99 lakh crore, against the Budget estimate of Rs 17.20 lakh crore.
The Rs 1.21 lakh crore reduction in the borrowing target reflects the government's effort to avoid additional borrowing pressure on the market, the sources said.
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The government is also focusing on longer-maturity securities to raise the weighted average maturity (WAM) of its debt. A longer WAM can help reduce rollover risks by spreading repayment obligations over a longer period, the sources said.
The Centre will continue to manage its debt prudently through switches and buybacks of government securities. Such operations help in managing the maturity profile of outstanding debt.
The borrowing calendar released by the Finance Ministry on Friday shows that the government will raise Rs 15,000 crore through green bonds during the second half of FY27.
The Centre will borrow Rs 23,000 crore every week through Treasury Bills during October-December, according to the calendar.
The H2 borrowing mix will include securities across different maturities. Five-year bonds will account for 12.1% of the planned borrowing, while three-year bonds will make up 6.9%.
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The Ways and Means Advances (WMA) limit for H2 FY27 has been set at Rs 50,000 crore. WMA is a temporary facility that allows the government to bridge short-term mismatches between receipts and expenditure.
The borrowing programme will be closely watched by the bond market for its impact on liquidity, government bond yields and the supply of sovereign securities.
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