The government on Thursday lowered the market borrowing target for the current financial year by Rs 10,000 crore amid buoyancy in tax collections.
Out of the gross market borrowing of Rs 14.31 lakh crore projected for FY 2022-23, the Government of India has decided to borrow Rs 14.21 lakh crore during the FY 2022-23, according to an official statement released by the Union Ministry of Finance.
Accordingly, the balance amount of Rs 5.92 lakh crore (41.7 per cent of Rs 14.21 lakh crore) is planned to be borrowed in the second half of the fiscal year 2022-23 (H2: FY 2022-23) through dated securities, including Rs 16,000 crore through issuance of Sovereign Green Bonds (SGrBs) as per the announcement made in the Union Budget 2022-23.
The gross market borrowing of Rs 5.76 lakh crore (40.5 per cent) shall be completed through 20 weekly auctions. The market borrowing will be spread over 2, 5, 7, 10, 14, 30 and 40 years of securities.
The share of borrowing (excluding SGrB) under different maturities will be: 2 year (6.25 per cent), 5 year (12.15 per cent), 7 year (10.42 per cent), 10 year (20.83 per cent), 14 year (19.10 per cent), 30 year (15.63 per cent) and 40 year (15.63 per cent). Details of the issuance of SGrB will be announced separately, the ministry said.
The government will continue to carry out switch operations to smoothen the redemption profile. Out of the Rs 1,00,000 crore of budgeted (BE) Switch amount, Rs 56,103 crore of switch auctions have already been conducted and the balance amount of switch auctions will be conducted in H2.
The government will continue to exercise greenshoe option to retain an additional subscription of up to Rs 2,000 crore against each of the securities indicated in the auction notification. The amount raised through this option will be limited to 3 to 5 per cent of the gross issuance for H2: FY 2022-23 and within the gross borrowing limit for FY 2022-23.
Weekly borrowing through issuance of Treasury Bills in the third quarter (Q3) of FY 2022-23 is expected to be Rs 22,000 crore with net borrowing of Rs (-) 0.81 lakh crore during the quarter. There will be the issuance of Rs10,000 crore under 91 DTBs, Rs 6,000 crore under 182 DTBs and Rs 6,000 crore under 364 DTBs through each auction conducted during the quarter.
To take care of temporary mismatches in Government accounts, the Reserve Bank of India has fixed the Ways and Mean Advances (WMA) limit for H2 of FY 2022-23 at Rs 50,000 crore. (ANI)