Govt cuts FY23 borrowing marginally, to sell Rs 5.92 lakh crore of bonds in October-March

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The Central government has marginally lowered its market borrowing target for financial year 2022-23 amid robust tax revenues.

The full-year borrowing target has been cut to Rs 14.21 lakh crore, from Rs 14.31 lakh crore as spelt out by the Budget for 2022-23. Despite the cut, the borrowing will be the highest ever.

The Centre will borrow Rs 5.92 lakh crore from the market in the second half of 2022-23, the finance ministry said in a statement on September 29. This will amount to 41.7 percent of the revised full year borrowing. As of September 23, the Centre had borrowed Rs 7.95 lakh crore through bond issuances in the first half of FY23.

The government had initially announced a borrowing of 14.95 trillion rupees in the budget for this fiscal year, which was then adjusted for a bond switch with the central bank.

In the fiscal second half, Rs 16,000 crore will be borrowed through the issuance of Sovereign Green Bonds as per the announcement made in the Union Budget 2022-23.

The remainder 5.76 lakh crore will be sold over 20 weekly auctions from October 7 until February 24. The borrowing will be spread over 2, 5, 7, 10, 14, 30 and 40-year securities.

The break-up of the October-March borrowing programme is as follows:

* 6.25 percent of the borrowing will be via bonds maturing in 2 years

* 12.15 percent of the borrowing will be via bonds maturing in 5 years

* 10.42 percent of the borrowing will be via bonds maturing in 7 years

* 20.83 percent of the borrowing will be via bonds maturing in 10 years

* 19.10 percent of the borrowing will be via bonds maturing in 14 years

* 15.63 percent of the borrowing will be via bonds maturing in 30 years

* 15.63 percent of the borrowing will be via bonds maturing in 40 years

The government will continue to carry out switch operations to smoothen the redemption profile. Out of the Rs 1 lakh crore of budgeted switch amount, Rs 56,103 crore of auctions have already been conducted.

In additions to the bonds, the Centre will also issue Treasury bills worth Rs 22,000 crore every week in the third quarter of FY23, amounting to a borrowing of Rs 2.86 lakh crore.

To take care of temporary mismatches in Government accounts, the Reserve Bank of India has fixed the Ways and Mean Advances (WMA) limit for H2 of FY 2022-23 at Rs 50,000 crore.