Challenges for market borrowings to persist but RBI to ensure smooth completion

The central bank will also take measures for enhancing retail investor awareness about the scheme. Representative image

Persisting global uncertainties will pose challenges for Indian government’s market borrowings despite the lowering of the budgeted fiscal deficit of the Centre, the Reserve Bank of India said in its annual report released May 30.

“The Reserve Bank would endeavour to ensure smooth completion of the government borrowing programme in line with the guiding principles of debt management while ensuring stable debt structure for the governments,” it added.

India must continue to lower its fiscal deficit to bolster its policy buffers and make its debt sustainable, the RBI said the annual report. The Centre aims to lower its budget gap to 5.9 percent of GDP in 2023-24, from 6.5 percent in the previous fiscal year.

The RBI is the debt manager for India’s central and state governments.

India’s central government aims to borrow Rs 15.43 lakh crore in 2023-24 through government bonds, compared to Rs 14.21 lakh crore in 2022-23. The net market borrowing, including Treasury bills, is budgeted at Rs 12.31 lakh crore, financing 68.89 percent of fiscal deficit in 2023-24, according to the RBI.

App for retail bonds

In 2023-24, the RBI aims to develop a mobile application for improving the ease of access for retail investors under the Retail Direct Scheme, through which investors can buy government bonds.

The central bank will also take measures for enhancing retail investor awareness about the scheme.

Meanwhile, the central bank will also seek to implement the Society for Worldwide Interbank Financial Telecommunications (SWIFT) module for putting through transactions of foreign central banks and expand the coverage of government debt statistics in RBI’s Data Warehouse System.

It will also conduct of capacity building programmes for sensitising the state governments about prudent practices in cash and debt management.