MC EXCLUSIVE Bond market borrowings may stay elevated next couple of years on repayments, says DEA Secretary

The government’s gross market borrowing for FY27 is projected at Rs 17.2 lakh crore, higher than street estimates

The government has tools such as open market operations (OMOs), switches, and buybacks to manage market borrowings, which may stay elevated over the next few years due to higher repayments, Anuradha Thakur, Secretary of the Department of Economic Affairs (DEA), said.

“The instruments we have to manage borrowings are what they are, such as OMOs, switches, and buybacks. We have this manoeuvrability,” Thakur told Moneycontrol in an interview.

She noted that both the government and the market have visibility on repayment schedules.

“This year we have had large repayments, and over the next couple of years we will also have a good amount of repayments. So, market borrowings may stay elevated,” Thakur said.

On yields, she added that while the 10-year bond has seen both uncomfortably high levels and very placid numbers recently, the government is prepared to manage the calendar to avoid expensive borrowing.

“We would love to have those delightfully, placid numbers, but we know the reality is that this is a heavy borrowing calendar due to repayments of Rs 5.5 lakh crore in 2026-27,” Thakur said.

She added that a larger T-bill issuance has been announced transparently, and other mechanisms will be used as needed to prevent market turbulence.

The government’s gross market borrowing for FY27 is projected at Rs 17.2 lakh crore, higher than street estimates, while it in net terms it is estimated at around Rs 11.7 lakh crore.

In addition, net Treasury bill (T‑bill) borrowing is expected to be about Rs 1.3 lakh crore, up from nil in FY26.