Boosted by better tax collections and higher monetisation receipts, the Union government on Friday announced a lower-than-budgeted gross market borrowing programme of Rs 15.99 lakh crore for FY27, compared with the Budget estimate of Rs 17.20 lakh crore.
The government plans to borrow Rs 7.86 lakh crore through dated securities in the second half of the financial year, including Rs 15,000 crore through Sovereign Green Bonds. Gross borrowing in FY26 stood at Rs 14.8 lakh crore.
“Net market borrowings (market borrowings for fiscal deficit financing) are kept at the budget levels, implying that in spite of the incipient fiscal pressures, the government is committed to the path of fiscal prudence laid out in the Budget,” Finance Ministry sources said.
Economists attributed the reduction in the borrowing programme to higher tax and non-tax receipts. “The surprise profits reported by companies as per their recent quarterly reports and the pace of monetisation receipts have allowed the government to meet the higher expenditures and this trend is likely to continue as has been seen from the higher than budgeted growth in direct tax receipts. This has led to the lower-than-budgeted borrowing to be put on the debt calendar,” said Ranen Banerjee, Partner and Leader, Economic Advisory, PwC India.
The government has raised Rs 55,500 crore so far in the current financial year through disinvestment against the budgeted target of Rs 80,000 crore. Another Rs 6,367 crore has been raised through monetization of PSU assets, while Rs 15,000 crore has been raised through dividends paid by CPSEs.
According to a government statement, the Rs 7.86 lakh crore borrowing programme for the second half will be completed through 23 weekly auctions. The maturity-wise distribution will include 6.9% in three-year securities, 12.1% in five-year, 9.1% in seven-year, 26.3% in 10-year, 17.6% in 15-year, 9.2% in 30-year, 8.9% in 40-year and 9.9% in 50-year securities. The government will also borrow Rs 23,000 crore a week through Treasury Bills during the third quarter.
“The focus on the long end will help us increase our Weighted Average Maturity (WAM), which had fallen during H1. A longer WAM will help reduce the roll-over risk,” a Finance Ministry source said.