The government will raise Rs. 6.61 Lakhs crores in the H2 for funding revenue gap. This borrowing will follow 21 weekly auctions and will take place between October to March of FY 224-25. It will lead to economic growth over a period. The total Gross Market Borrowing is Rs. 14.01 Lakhs crores in FY 2024-25. However, the government decides to retain the borrowings. Thus, the government will be raising only Rs. 6.61 Lakhs crores in H2. The borrowing amount will be 47.2% of the total gross amount. Rs. 6.61 Lakh Crores of government borrowings will include the Sovereign Green Bonds (SGrBs). Let us have more details about this training below.
How The Goverment Retained The Borrowing Target?
The government decides to raise the borrowing of Rs 6.61 Lakh crores in H2 to fund the revenue gap. These borrowings will have different years of securities. It includes 3, 5, 7, 10, 15, 30, 40, and 50 years of securities. Following are shares of borrowing for different maturities:
3 year: 5.3%
5 Year: 10.6%
7 Year: 7.6%
10 Year: 24.8%
15 Year: 13.2%
30 Year: 12.1%
40 Year: 15.9%
50 years: 10.6%
Let us understand below how these borrowings are divided. The company will have a weekly borrowing in the third quarter of Rs. 19,000 crores for 13 weeks. There will be 91 treasury bills each dated with Rs. 7,000 crores of issuance. There will be 6,000 crore under 11 DTB and 6,000 crore under 364 DTB. The limit for Ways and Means Advances for H2 is Rs. 50,000 crore.
This will be the second half (H2). The first half was 52.8% or Rs. 7.4 Lakhs raised earlier. The previous year had a gross borrowing of Rs. 15.43 Lakhs compared to the current year’s borrowing of Rs. 14.13 Lakhs crores. There will be a Rs. 12,000 crore reduction in the gross borrowings. The year 2024-25 is the highest revenue of Rs. 15.43 Lakh crores. At the same time, the estimated revenue will be Rs. 14.01 lakh crores and Rs. 11.63 Lakh crores. There might be private investment picking in the steel and cement sector.
The government is retaining the borrowing targets for raising Rs. 6.61 Lakh crore. It is H2 (second half) of the borrowing. It will help in bridging the revenue gap. While H1 was already taken. The government wants to focus on the economic growth of the country. It is crucial for the country’s growth. They have to fulfil their target of making India a developed country. Finance Minister Nirmala Sitharaman proposes Rs. 14.13 Lakh crore for borrowing. There will be 21 weekly auctions to complete these transactions. In conclusion, the government is going to retain the borrowing. The target to raise Rs. 6.61 Lakh crore will take place from October to March.