NEW DELHI: The Finance Ministry is working on a framework to issue green bonds in the second half of the current fiscal, a top government source told TNIE. Some part of the borrowing will be financed through these bonds for which the preparatory work is going on, said the sources, refusing to give details about the quantum.
Finance Minister Nirmala Sitharaman in her budget speech announced the government’s plan to issue green bonds in the fiscal year 2022-23 (FY23) as part of its overall market borrowing to mobilise resources for green infrastructure.
“The green bond framework will involve the details relating to commitment for climate change and green economy. Kind of initiatives being taken for the environment changes, deployment of resources etc. This is work-in-progress, after which it will be placed in the public domain so that the investors can go through the framework,” the source said.
“The framework will contain the details of the projects to be financed. As we are not making any additional borrowing, we have to borrow within the borrowing limits already decided in the budget. So, only those schemes will be financed that already fall within the ambit of the budget. Also, the requirement of funds for the execution of projects in the current financial year will be the deciding factor for the quantum of bonds to be issued,” the source added.
The source also said that the government will look at the pricing of bonds too. Green bonds should not be costlier than normal bonds. Depending upon the response to these bonds, the government may consider raising funds via them from foreign investors, according to the sources.
In addition, speaking of the benefits of issuing green bonds, the source stated that at present, there are investors available for normal bonds but with green bonds, the market will get diversified. The diversification of the market will help in getting competitive pricing.
Worst of crude oil prices behind us: FinMin official
After crude oil prices eased on Wednesday, a top Finance Ministry official said the worst is behind when it comes to rising oil prices. India imports more than 85 per cent of its oil requirement.
The oil prices were trading at USD 98 a barrel on Friday but came down to USD 92.04 per barrel on Wednesday on account of disappointing Chinese economic data. Retail sales in China surged by 2.7 per cent in July from a year ago, while industrial production grew by 3.8 per cent on a year-on-year basis.
The Indian financial markets were closed on Monday and Tuesday due to Independence Day and Parsi New Year respectively. Meanwhile, external affairs minister S Jaishankar has defended India’s crude oil imports from Russia.
The US and some others may not appreciate India buying Russian oil, but they have accepted it and made them realise that the government had the “moral duty” to ensure the people got the “best deal”, Jaishankar said.