- By Shibra Siddiqui
- Fri, 28 Mar 2025 05:16 PM (IST)
- Source:JND
The Government of India plans to take a loan of a whopping amount of 8 lakh crore rupees in the next 6 months, as the Ministry of Finance on Thursday announced its borrowing plans for the first half of the financial year 2025-26. The centre will raise 54% of the annual gross borrowing target of Rs 14.82 lakh crore from the market for this year.
Notably, 10 thousand crore of the amount to be borrowed will be mopped up through sovereign green bonds(SGrBs) to fund the environmentally sustainable projects. The borrowing will take place in 26 weeks through weekly auctions, and securities will mature between 3 to 50 years. The amount planned by the government to be borrowed in the first half is slightly lower than market expectations of 56-58% of annual gross borrowing.
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"The market borrowing will be spread over 3, 5, 7, 10, 15, 30, 40 and 50-year securities. The share of borrowing (including SGrBs) under different maturities will be: 3-year (5.3%), 5-year (11.3%), 7-year (8.2%), 10-year (26.2%), 15-year (14.0%), 30-year (10.5%), 40-year (14.0%) and 50-year (10.5%)," said the government in a notification.
To smooth redemption and manage debt repayment effectively, the government will buy back or switch securities. It has also reserved the right to retain an additional Rs 2,000 crore per security in case of strong demand.
To address temporary mismatches in cash flow, the RBI has set the Ways and Means Advances (WMA) limit at Rs 1.50 lakh crore for the first half of the financial year.
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The government generates its revenue from taxes and by borrowing money. This helps the government to regulate its spending. Borrowing allows the government to invest in long-term projects like highways, railways, and energy, which drive economic growth.
