The Government of India is set to borrow ₹7.86 lakh crore through dated securities during the second half of the financial year 2026-27 (H2 FY27). This significant borrowing includes ₹15,000 crore specifically earmarked for Sovereign Green Bonds (SGrBs), as per the borrowing calendar finalized in consultation with the Reserve Bank of India (RBI).
FY27 Borrowing Below Budget Estimates
The total market borrowing through dated securities for the entire FY27 is now projected at ₹15,99,506 crore. This figure is notably below the Budget Estimate of ₹17,20,000 crore, reflecting the government's ongoing focus on fiscal prudence.
H2 Borrowing Plan Details
The planned ₹7.86 lakh crore H2 borrowing will be executed through 23 weekly auctions. These funds will be raised via securities with a broad range of maturities, extending from three years to 50 years.
- Ten-year securities will constitute the largest portion of H2 borrowing, accounting for 26.3%.
- Securities with a 15-year maturity will make up 17.6%.
- Five-year securities will represent 12.1% of the borrowing.
- Seven-year securities are set to account for 9.1%, while three-year securities will be 6.9%.
- Longer-duration bonds include 30-year securities at 9.2%, 40-year securities at 8.9%, and 50-year securities at 9.9%.
The issuance of ₹15,000 crore through Sovereign Green Bonds is a key component of this borrowing programme, underscoring the government's commitment to financing environmentally sustainable projects.
Managing Redemption Profiles and Flexibility
To smooth its redemption profile, the government will continue to employ switches and buybacks of government securities. Furthermore, it retains the option to utilize a greenshoe facility, allowing for additional subscriptions of up to ₹2,000 crore against each security specified in the auction notifications.
Treasury Bill Borrowing and WMA Limits
For the third quarter of FY27, the government plans to borrow ₹23,000 crore weekly through Treasury Bills (T-Bills) across 13 auction weeks. This will comprise ₹8,000 crore each for 91-day and 182-day T-Bills, and ₹7,000 crore for 364-day T-Bills.
The RBI has set the Ways and Means Advances (WMA) limit at ₹50,000 crore for the second half of FY27. This facility is crucial for managing temporary mismatches between government receipts and expenditures.
Fiscal Prudence Continues
The government had already reduced its first-half market borrowing by ₹1.11 lakh crore through switches. An additional ₹10,000 crore reduction has been made for the second half, bringing the total FY27 market borrowing ₹1.21 lakh crore below the initial Budget Estimate. This reflects a consistent emphasis on fiscal prudence while adhering to the financial year's estimates.