Centre to borrow Rs 8 lk cr in 1st half of FY26 through dated papers

The Centre will borrow ?8 lakh crore from the market through dated securities in the first half of the next fiscal, which constitutes 54% of the full-year target, the finance ministry said on Thursday.

The amount is lower than 56-59% of the annual target that some analysts had projected but is slightly higher than what the government had announced for the first half of the current fiscal.

The borrowing includes ?10,000 crore through sovereign green bonds.


Experts said the borrowing target aims to enable the government to fund its revenue gap in the first half of 2025-26 without causing any disruption in the bond market. It's also unlikely to crowd out state governments and private players in the debt market, they added.

Yield on the benchmark 10-year securities closed at 6.6022% on Thursday, hitting its lowest in more than three years.

The government has budgeted gross market borrowing of ?14.82 lakh crore (through dated securities) for 2025-26. Of this, net borrowing is pegged at ?11.54 lakh crore. It aims to contain its fiscal deficit at 4.4% of gross domestic product during the year, against 4.8% this fiscal. The borrowing in the first half is proposed to be over in 26 weekly tranches of ?25,000-36,000 crore each, the finance ministry said in a statement.

"As hitherto, all the auctions covered by the (borrowing) calendar will have the facility of non-competitive bidding under which 5% of the notified amount will be reserved for the specified retail investors," the ministry said.

The share of borrowing under different maturities will be: three-year (5.3%), five-year (11.3%), seven-year (8.2%), 10-year (26.2%), 15-year (14%), 30-year (10.5%), 40-year (14%) and 50-year (10.5%).

"The borrowing target is along the expected lines. The composition of securities with different maturity periods, however, is tweaked a bit," said India Ratings chief economist DK Pant.

The proportion of shorter tenure (three-five years) papers is proposed to go up to 16.6% from 14.4% a year before and that of longer-term papers (15-50 years) will drop to 49% from 51.2%, Pant said. However, the share of medium-term (seven to 10-year) papers remains the same at 34.4%.

The government will reserve the right to exercise the greenshoe option to retain an additional subscription of up to ?2,000 crore against each of the securities.

Weekly borrowing through treasury bills is expected to be ?19,000 crore for 13 weeks, with issuance of 91-day papers worth ?9,000 crore, 182-day ones worth ?5,000 crore and another ?5,000 crore through 364-day securities.

To meet temporary mismatches in the government accounts, the Reserve Bank of India has fixed the ways and means advances limit for the first half at ? 1.50 lakh crore.