New Delhi, Mar 28 (KNN) In a significant development, the Indian government has unveiled its borrowing program for the first half of the fiscal year 2024-25 (H1 FY25), amounting to a staggering Rs 7.5 trillion. This decision was finalised in consultation with the Reserve Bank of India (RBI).

The borrowing plan, which accounts for 53.08 per cent of the total gross market borrowing of Rs 14.13 trillion projected for the entire fiscal year 2024-25, will be raised through the issuance of dated securities.

Notably, the government has introduced a new 15-year tenor bond, aligning with market feedback and global practices.

Through the inaugural 15-year security, the Centre aims to borrow Rs 1.04 trillion during the first half of the next financial year. This move is expected to diversify the government's borrowing portfolio and cater to the diverse investment preferences of market participants.

The market borrowing will be facilitated through 26 weekly auctions, with the size of the weekly government bond auctions ranging from Rs 22,000 crore to Rs 38,000 crore during H1 FY25.

Additionally, the government plans to issue sovereign green bonds worth Rs 12,000 crore, demonstrating its commitment to sustainable finance and environmental initiatives.

To smoothen the redemption profile, the government will continue to carry out switching of securities. Furthermore, it reserves the right to exercise the greenshoe option, allowing for the retention of an additional subscription of up to Rs 2,000 crore against each security indicated in the auction notifications.

Complementing the dated securities, the borrowing program also includes the issuance of treasury bills.

In the first quarter of FY25, the weekly borrowing through treasury bills is expected to be Rs 27,000 crore for the first seven auctions and Rs 22,000 crore for the subsequent six auctions.

The Centre will issue 91-day treasury bills worth Rs 1.44 trillion, 182-day T-bills worth Rs 79,000 crore, and 364-day T-bills worth Rs 98,000 crore.

To address temporary mismatches in government accounts, the RBI has fixed the Ways and Means Advances (WMA) limit for the first half of FY 2024-25 at Rs 1.5 trillion, providing a liquidity buffer for the government's borrowing operations.

(KNN Bureau)