Borrowing – Government finalises Rs 8.20 lakh crore H1 FY27 plan
Borrowing – The Government of India has outlined its borrowing roadmap for the first half of the financial year 2026–27, following consultations with the Reserve Bank of India. The plan reflects a calibrated approach to managing public finances while ensuring stability in the debt market.
Revised borrowing target after budget adjustments
The finance ministry confirmed that the initial gross borrowing estimate for FY27 stood at Rs 17.20 lakh crore. However, after carrying out switching operations involving government securities post-Budget, the figure has been revised downward to Rs 16.09 lakh crore. This adjustment is aimed at improving the overall debt structure and reducing refinancing pressure in the near term.
Half-year borrowing to be raised through dated securities
Out of the updated borrowing plan, Rs 8.20 lakh crore—just over half of the total—will be mobilised during the first half of the fiscal year. The government intends to raise this amount through the issuance of dated securities, including Rs 15,000 crore via Sovereign Green Bonds. These green bonds are expected to support environmentally sustainable projects while broadening the investor base.
Auction schedule and maturity distribution
To meet its borrowing target, the government has scheduled 26 weekly auctions. These issuances will be distributed across a wide range of maturities, spanning from short-term three-year papers to long-term 50-year securities. This diversified maturity profile is designed to balance investor demand and minimise rollover risks.
The allocation across maturities indicates a strong emphasis on benchmark ten-year securities, which will account for the largest share at 29 percent. Other segments include five-year bonds at 15.4 percent, fifteen-year at 14.5 percent, and fifty-year securities at 9.6 percent. Shorter-duration instruments such as three-year and seven-year bonds will each contribute 8.1 percent, while thirty-year and forty-year papers will make up smaller portions of the total borrowing mix.
Measures to manage redemption pressure
The government has also indicated that it will continue to use switching and buyback operations as tools to manage its debt obligations efficiently. These measures help smooth the repayment schedule and prevent large clusters of maturing securities from creating pressure on public finances.
Additionally, authorities will retain the option to use the greenshoe facility during auctions. This provision allows the government to accept extra bids of up to Rs 2,000 crore per security, depending on market conditions and investor appetite.
Treasury Bills and short-term liquidity planning
Alongside long-term borrowing, the government has outlined its short-term funding strategy through Treasury Bills for the first quarter of FY27. Weekly borrowings are estimated at Rs 24,000 crore over a 12-week period. This includes Rs 12,000 crore through 91-day bills and Rs 6,000 crore each through 182-day and 364-day instruments.
RBI sets advance limit for cash flow management
To handle temporary mismatches in government cash flows, the Reserve Bank of India has fixed the Ways and Means Advances limit at Rs 2.50 lakh crore for the first half of FY27. This facility provides a buffer for the government to manage short-term liquidity requirements without disrupting market borrowings.
Overall, the borrowing plan reflects a balanced approach that combines fiscal discipline with market responsiveness. By spreading issuances across maturities and maintaining flexibility in auction mechanisms, the government aims to ensure smooth financing of its expenditure while keeping debt sustainability in focus.