FY26 gross borrowing shoots up to Rs 14.82 lakh crore on repayments

Finance Minister Nirmala Sitharaman

The Centre will borrow Rs 14.82 lakh crore from markets in 2025-26 in gross terms to finance its fiscal deficit of 4.4 percent. This is significantly higher than the estimate for the current financial year, Finance Minister Nirmala Sitharaman said while presenting the Budget for FY26.

The gross borrowing for 2024-25 is seen at Rs 14.01 lakh crore.

The gross borrowing number for 2025-26 is significantly higher versus the current fiscal year, since it includes repayment of Covid-19 related loans, which will become due during the financial year.

In net terms, however, borrowings through the bond market have been pegged lower at Rs 11.54 lakh crore (or 3.2 percent of GDP) for FY26 versus Rs 11.63 lakh crore in 2024-25.

In the current financial year, till January 27, the central government has completed gross borrowings of Rs 12.44 lakh crore and in net terms the figure is at Rs 10.06 lakh crore.

The government's borrowing is among the most important determinants of interest rates in the economy. Higher-than-expected borrowings can push up rates for all bond issuers — sovereign and corporate — while interest rates can decline if the government tightens its belt and borrows less than anticipated.