Government Borrowing Plan for Fiscal Year 2025-26

The Indian government has outlined its borrowing strategy for the remainder of the fiscal year, with a focus on maintaining fiscal discipline and accommodating market demands.

Borrowing Details

• The government plans to borrow ₹6.77 lakh crore through dated securities in the second half of the fiscal year.
• This brings the total borrowing for the fiscal year down to ₹14.72 lakh crore, slightly lower than the initially budgeted ₹14.82 lakh crore.
• In the first half, ₹7.95 lakh crore has already been borrowed.

Fiscal Discipline and Market Stability

• The strategy aims to avoid destabilizing the bond market amidst pressures from additional US tariffs and increased defense spending due to Operation Sindoor.
• The borrowing plan remains predictable, signaling commitment to fiscal discipline and preventing crowding out of state and private sector borrowing.

Fiscal Deficit Target

• The fiscal deficit target is set at 4.4% of GDP for 2025-26, down from 4.8% in the previous year.
• Market borrowings are highlighted as one of several sources to finance the fiscal deficit.

Details of Securities Issuance

• The second-half borrowing includes ₹10,000 crore through sovereign green bonds.
• The borrowing will occur over 22 weekly tranches, each ranging from ₹28,000-33,000 crore.

Bond Maturities

• The distribution of bond maturities includes: 
  • Three-year: 6.6%
  • Five-year: 13.3%
  • Seven-year: 8.1%
  • Ten-year: 28.4%
  • Fifteen-year: 14.2%
  • Thirty-year: 9.2%
  • Forty-year: 11.1%
  • Fifty-year: 9.2%
• The share of shorter-term securities (3-5 years) will increase to 19.9% from 15.9%.
• Longer-term securities (15-50 years) will decrease to 43.7% from 51.8%.
• Medium-term securities (7-10 years) will rise to 36.5% from 32.4%.

Additional Financial Measures

• The government can utilize a greenshoe option for an additional subscription of up to ₹2,000 crore against each security type.
• Weekly borrowing through treasury bills is set at ₹19,000 crore for 13 weeks, divided among 91-day, 182-day, and 364-day securities.
• The Reserve Bank of India has fixed the ways and means advances limit at ₹50,000 crore to manage temporary mismatches in government accounts.