Centre plans to borrow Rs 8.20 lakh cr from market in first half of FY27

The Centre is planning to mobilise Rs 8 lakh crore through dated securities during the April-September period of 2026-27 to fund the revenue gap, the finance ministry said on Friday.

Gross Market Borrowings in BE 2026-27 were Rs 17.20 lakh crore. Since the Budget presentation, switches of G-Sec were conducted, reducing Gross Market borrowing to Rs 16.09 lakh crore, it said.

"Of Rs 16.09 lakh crore, Rs 8.20 lakh crore (51 per cent) is planned to be borrowed in H1 through issuance of dated securities, including Rs 15,000 crore of Sovereign Green Bonds (SGrBs)," it said.

Finance Minister Nirmala Sitharaman, in the Budget, proposed to borrow Rs 17.2 lakh crore to fund its fiscal deficit projected at 4.3 per cent of the GDP.

In absolute terms, the fiscal deficit is pegged at Rs 16.9 lakh crore for 2026-27.

"To finance the fiscal deficit, the net market borrowings from dated securities are estimated at Rs 11.7 lakh crore. The balance financing is expected to come from small savings and other sources. The gross market borrowings are estimated at Rs 17.2 lakh crore," she had said while delivering the Budget 2026-27.

According to the statement, the Gross Market Borrowings of Rs 8.2 lakh crore shall be completed through 26 weekly auctions.

The market borrowing will be spread over 3, 5, 7, 10, 15, 30, 40 and 50-year securities, it said.

The share of borrowing (including SGrBs) under different maturities will be: 3-year (8.1 per cent), 5-year (15.4 per cent), 7-year (8.1 per cent), 10-year (29 per cent), 15-year (14.5 per cent), 30-year (7.3 per cent), 40-year (8 per cent) and 50-year (9.6 per cent).

To enable institutional and retail investors to plan their investments efficiently and to provide transparency and stability to the Government Securities market, the government, in consultation with the Reserve Bank of India (RBI), plans to do weekly borrowing ranging from Rs 28,000 crore to Rs 34,000 crore during the period.

All the auctions covered by the calendar will have the facility of non-competitive bidding under which five per cent of the notified amount will be reserved for the specified retail investors, it said.

Like in the past, it said, the government, in consultation with the RBI, will continue to have the flexibility to bring about modifications in the above calendar in terms of notified amount, issuance period, maturities, etc. and to issue different types of instruments, including instruments having non-standard maturity, floating rate bonds (FRBs), inflation indexed bonds (IIBs), depending upon the requirement, evolving market conditions and other relevant factors, after giving due notice to the market.

The calendar is subject to change, if circumstances so warrant, including for reasons such as intervening holidays, it said.

About switch/buyback of dated securities through auction, it said, they are done to smoothen the redemption profile.

"Switches of dated securities through auction will be conducted on the third Monday of every month or at more frequent intervals. In case the third Monday is a holiday, the switch auction will be conducted on the fourth Monday of the month," it said.

The Centre will continue to reserve the right to exercise the greenshoe option to retain an additional subscription of up to Rs 2,000 crore against each of the securities indicated in the auction notifications, it said.

Weekly borrowing through issuance of Treasury Bills (T-Bills) in the first quarter (Q1) of FY 2026-27 is expected to be Rs 24,000 crore for 12 weeks with issuance of Rs 12,000 crore under 91-day T-Bills, Rs 6,000 crore under 182-day T-Bills and Rs 6,000 crore under 364-day T-Bills.

To take care of temporary mismatches in government accounts, the RBI has fixed the Ways and Means Advances (WMA) limit for H1 of FY 2026-27 at Rs 2.50 lakh crore.