Centre to raise `7.5 L-cr via market borrowings
The government on Wednesday said that the Centre is planning to raise `7.5 lakh crore through market borrowing in the first half (H1) of the financial year 2024-25 (i.e. Aprilseptember) to fund the revenue gap to push the economic growth in the country.
The aim of the government is to enable institutional and retail investors to plan their investments efficiently, and provide transparency and stability to the government securities market, the finance ministry said in an official statement.
“The government, in consultation with the Reserve Bank of India (RBI), hereby notifies the indicative calendar for issuance of government dated securities including sovereign green bonds (SGRB) for the first half of the fiscal year 2024-25 (April to September),” the statement said.
“Out of gross market borrowing of `14.13 lakh crore estimated for 202425, `7.5 lakh crore, or 53 per cent, is planned to be borrowed in H1 FY25. Based on market feedback and in line with global market practices, it has been decided to introduce a new dated security of 15year tenor,” the statement said.
Union finance minister Nirmala Sitharaman in the interim Budget had proposed to borrow `14.13 lakh crore by issuing dated securities to meet revenue shortfall in the next financial year. This is lower than last year’s gross borrowing estimate of `15.43 lakh crore, which was the highest ever.
“The gross and net market borrowings through dated securities during 2024-25 are estimated at `14.13 lakh crore and `11.75 lakh crore, respectively. Both will be less than that in 2023-24. Now that private investments are happening at scale, the lower borrowings by the central government will facilitate larger availability of credit for the private sector,” she said.
There are signs of private investment picking up in the steel and cement sector due to massive capital expenditure by the government. Against the estimate of `10 lakh crore for 2023-24, the government has earmarked `11.11 lakh crore during the next year.