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Centre To Borrow 57.55% Of Its Full-year Target In H1FY24: Finance Ministry

The government borrowing programme is expected to be finished in 26 weekly instalments of Rs 31,000-39,000 crore each

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The central government will borrow 57.55 per cent of its full-year target in the first half of the upcoming fiscal year (2023-24, or FY24), frontloading its borrowing programme for FY24.

This will, however, be less than the borrowing in the first six months of 2022-23 (FY23), which will be 59 per cent of the full-year goal.

In recent years, borrowing at 60 to 63 per cent has been the standard. “Of the Rs 15.43 trillion gross market borrowing projected in the Union Budget for FY24, Rs 8.88 trillion (57.55 per cent) is planned to be borrowed in the first half (H1),” the Ministry of Finance said in a statement.

“Given the increase in redemptions in H2, the H1 gross borrowing is less front-ended than in previous years. As a result, net borrowing will be more evenly distributed between the two halves,” said Aditi Nayar, senior economist at ICRA.

The government's borrowing programme will be finished in 26 weekly tranches of Rs 31,000-39,000 crore each. The debt will be shared out over three, five, seven, ten, fourteen, thirty and forty years.

The share of borrowing under different maturities will be three-year (6.31 per cent), five-year (11.71 per cent), seven-year (10.25 per cent), 10-year (20.5 per cent), 14-year (17.57 per cent), 30-year (16.1 per cent), and 40-year (17.57 per cent).

The finance minister, on the other hand, stated that the issuance of sovereign green bonds (SGBs) will be announced in the second half (H2) of FY24. In FY23, the government auctioned off SGBs in the second half of the fiscal year.

“The Reserve Bank of India has fixed the ways and mean advances limit for H1FY24 at Rs 1,50,000 crore to address temporary mismatches in government accounts,” the finance ministry said.

Finance Minister Nirmala Sitharaman predicted in her latest Budget that the Centre's fiscal deficit would fall to 5.9 per cent of GDP in FY24, down from 6.4 per cent in FY23.

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