Home / Business and Economy / India Slashes Market Borrowing by ₹1.2 Lakh Crore
India Slashes Market Borrowing by ₹1.2 Lakh Crore
26 Sep
Summary
- Market borrowing reduced by ₹1.2 lakh crore to ₹15.99 lakh crore.
- ₹8.2 lakh crore planned for the first half of the fiscal year.
- Fiscal deficit for FY27 targeted at 4.3% of GDP.
The Indian government has announced a significant reduction in its full-year market borrowing, paring the target by ₹1.2 lakh crore to ₹15.99 lakh crore. This strategic move aims to contain rising yields in the face of global economic uncertainties. The revised borrowing plan reflects a commitment to fiscal prudence, with the fiscal deficit for FY27 targeted at 4.3% of the Gross Domestic Product (GDP).
Of the total revised borrowing, approximately ₹8.2 lakh crore is slated for the first half of the fiscal year. The remaining ₹7.86 lakh crore will be raised through dated securities in the second half, including ₹15,000 crore from sovereign green bonds. The finance ministry emphasized that net market borrowings remain at budget levels, underscoring the government's dedication to its fiscal consolidation path.
To further manage debt and reduce rollover risk, the government plans to increase the weighted average maturity of its debt. This is being achieved through prudent debt management strategies like switches and buybacks. India's 10-year benchmark bond yield has recently seen a continued surge, closing at 7.1194%. The borrowing program will be spread across securities with tenors ranging from three to 50 years, offering a diverse range of investment options.
