NEW DELHI: The government has no plans to raise funds through the issuance of sovereign green bonds in the current financial year, a finance ministry official told TNIE. The official on the condition of anonymity said that there is no need for raising funds through green bonds as of now.
The government raised R 16,000 crore in two tranches of R8,000 each through the issuance of sovereign green bonds for the first time in 2022-23. However, while announcing the borrowing calendar for the first half of the current financial year, it did not have the option of raising funds through green bonds. The government had then said that the issuance of sovereign green bonds would be announced in the second half of 2023-24.
Finance Minister Nirmala Sitharaman announced in the Union Budget the issue of green bonds as part of the government’s overall market borrowings for mobilizing resources for green infrastructure. Green bond proceeds are meant to be deployed in public sector projects which help in reducing the carbon intensity of the economy.
Meanwhile, the official said that the government would meet its fiscal deficit target for the current fiscal year because of lower crude oil prices and buoyant tax collection. He is also optimistic about the retail inflation remaining below 5% in the current financial year.
"We will be able to meet the fiscal deficit target for the current financial year on account of lower oil prices and growth in tax revenue both direct and indirect taxes," the official said. The government has set a disinvestment target of R51,000 crore for FY 24, which is the lowest target in seven years.
The Reserve Bank of India (RBI) has decided to transfer over R87,000 crore surplus to the Central government exchequer. This will also boost the Centre’s confidence in meeting its fiscal deficit target. The government has set a fiscal deficit target of 5.9% of the GDP for FY 24. It has committed to bring it down to 4.5% of the GDP. The retail inflation in April fell to an 18-month low at 4.7% owing to a decline in food prices. Global crude oil prices have also been decreasing over the last few months. According to the official, crude oil prices will remain low on account of US recession fears.
India imported more than 87% of its domestic consumption in FY23. The Centre has projected the total gross market borrowing at R15.43 lakh crore for FY24. Sitharaman had said that the government would borrow R15.45 lakh crore with a net market borrowing of R11.8 lakh crore from small savings and other sources.