The Union government is looking to raise Rs 8.45 lakh crore through borrowings in the first half of 2022-23 to fund the revenue gap for reviving the economy, the finance ministry said on Thursday.
Out of the gross market borrowing of Rs 14.31 lakh crore estimated for the next financial year, Rs 8.45 lakh crore is planned to be borrowed in the first half or April-September period.
The government has front loaded its borrowing programme as the 60 per cent of the record borrowing planned for the financial year beginning April 1 would be complete in the first six months itself.
Front loading of borrowing will be done with the objective of pushing capital expenditure which will have a multiplier effect on the economy.
As per the Union Budget document, the gross market borrowing through dated securities for 2022-23 will be Rs 14,95,000 crore. Taking into account the switch operations conducted on January 28, 2022, the gross market borrowing through dated securities for 2022-23 is expected at Rs 14,31,352 crore, the ministry said in a statement.
The gross borrowing for 2021-22 was Rs 12,05,500 crore.
The borrowing is scheduled to be completed in 26 weekly tranches of Rs 32,000-33,000 crore, the ministry said.
The borrowing will be spread under 2, 5, 7, 10, 14, 30 and 40 year securities and Floating Rate Bonds (FRBs) of various tenors. Long term securities, including the 14, 30 and 40 year ones, will make up for a significant chunk of the borrowing.
FRBs of various tenors will be issued on a fortnightly basis.
The government will continue to carry out switching of securities to smoothen the redemptions, the statement said, adding that it may continue to exercise the greenshoe option to retain an additional subscription up to Rs 2,000 crore against each of the securities indicated in the auction notification.
Weekly borrowing under treasury bills in the first quarter of 2022-23 is expected to be Rs 33,000-34,000 crore, with net borrowing of Rs 2.40 lakh crore during the quarter.
There will also be an issuance of Rs 13,000 crore under 91 DTBs, Rs 12,000-13,000 crore under 182 DTBs and Rs 8,000 crore under 364 DTBs in each auction to be held during the quarter.
To take care of the temporary mismatches in government account, the statement said the Reserve Bank of India has fixed the Ways and Mean Advances (WMA) limit for H1 of FY'23 at Rs 1,50,000 crore.
The government and the RBI are working jointly to bring a framework for issuance of sovereign green bonds.
In her Union Budget speech, Finance Minister Nirmala Sitharaman had announced that the government proposes to issue sovereign green bonds to mobilise resources for green infrastructure.
The net borrowing during 2022-23 would be Rs 11.6 lakh crore, which is nearly Rs 2 lakh crore higher than the current year's budget estimate of Rs 9.7 lakh crore.
Gross borrowing includes repayment of past loans. The government raises money from the market to fund its fiscal deficit through dated securities and treasury bills.