Government Borrowing

Alex Kerr, an economist with Capital Economics, said the figures highlighted the limited scope Reeves had to increase day-to-day spending without raising taxes

The gross market borrowing will be conducted through 21 weekly auctions across securities with maturities of 3, 5, 7, 10, 15, 30, 40, and 50 years

The Centre is planning to raise Rs 7.5 lakh crore through market borrowing in the April-September period of 2024-25 to fund the revenue gap to push economic growth, the finance ministry said on Wednesday. Out of gross market borrowing of Rs 14.13 lakh crore estimated for 2024-25, Rs 7.5 lakh crore, or 53 per cent, is planned to be borrowed in the first half (H1), an official statement said. Finance Minister Nirmala Sitharaman in interim Budget proposed to borrow Rs 14.13 lakh crore by issuing dated securities to meet revenue shortfall in the next financial year. This is lower than last year's gross borrowing estimate of Rs 15.43 lakh crore, which was the highest ever. "The gross and net market borrowings through dated securities during 2024-25 are estimated at Rs 14.13 lakh crore and Rs 11.75 lakh crore, respectively. "Both will be less than that in 2023-24. Now that private investments are happening at scale, the lower borrowings by the central government will facilitate larger .

The Centre told the Supreme Court on Wednesday it is ready to allow the Kerala government to borrow Rs 5,000 crore, subject to certain conditions, to deal with the financial issues facing the state as a "very special and exceptional measure". However, the Kerala government said Rs 5,000 crore "does not take us anywhere" and the absolute minimum requirement stood at Rs 10,000 crore. The Centre's statement came a day after a bench of Justices Surya Kant and K V Viswanathan asked it to consider providing a one-time bailout package to Kerala by March 31 to deal with the resource crunch. The apex court was hearing a suit filed by the Kerala government accusing the Union of India of interfering in the exercise of its "exclusive, autonomous and plenary powers" to regulate the state's finances by imposing a ceiling on borrowing. "However, giving utmost consideration to the suggestion of the court, as a very special and exceptional measure, not to be used or cited as a precedent by any othe

The borrowing cost for states continued to fall for the third week in a row, with the weighted average price falling to 7.44 per cent in the debt auction on Tuesday. The cost had remained at a two-year high throughout January sniffing at 7.8 per cent. However, the overall cost has been falling since the interim Union Budget, which forecast a lower than anticipated borrowing and a fiscal deficit target of 5.8 per cent for this fiscal and 5.1 per cent for the next financial year. The weighted average cut-off rate eased by 2 basis points to 7.44 per cent on Tuesday, with issuance trailing the indicated amount for the fifth consecutive week, Icra Rating said in a note. Twelve states raised Rs 32,800 crore through State Government Securities (SGS) on February 27 and the amount is 27 per cent lower than the highest-ever weekly auction of Rs 45,200 crore indicated for this week in the fourth quarter auction calendar. Both limited supply and the falling overall interest rates pulled down

Next financial year also likely to see similar target

Kerala Finance Minister K N Balagopal on Saturday said the state's liquidity position was severely stressed due to the reduction in the annual borrowing limit and sought the intervention of Union Finance Minister Nirmala Sitaraman into the issue. In a letter written to the union finance minister, Balagopal said the liquidity stress got aggravated specifically because of the cut in the annual borrowing ceiling for the financial years 2022-23 and 2023-24. He said Kerala has been relying on its own sources of revenue for meeting the expenditure during recent years, unlike many other states. Balagopal said the decision of the Union Government to include the borrowing of institutions like KIIFB (Kerala Infrastructure Investment Fund Board) and lower the annual borrowing limit of the state with retrospective effect was causing severe liquidity stress for Kerala. "I write this letter to invite your kind attention to the issue of liquidity stress being faced by Kerala due to the reduction

TMS Ep531: Pilot shortage, junk food, consumption stocks, govt borrowing

Who is to blame for India's pilot shortage? Is junk food the new cigarette? Are consumption stocks a good bet ahead of festive season? What is govt's borrowing programme and calendar? All answers here

The shift, previously unreported, has helped states reduce costs by more than 40 basis points (bps) over the past 15 months

The Central Government adheres to a semi-annual borrowing calendar, while State Governments follow quarterly calendars

To borrow Rs 6.55 trillion in second half

India plans to borrow about Rs 6.55 trillion in the second half of the current fiscal year that started April 1, according to government's budget estimates

The decision sets the stage for billions of dollars of inflows just when the bond market is straining under record government borrowings

Eight states raised Rs 15,900 crore from auctioning their debt, or state government securities, on Tuesday at a coupon of 7.42 per cent, 6 basis points (bps) less than the previous auction. The debt raising of Rs 15,900 crore was nearly 45 per cent lower than the indicated amount for the week in the auction calendar, Icra Ratings said in a note. Despite the increase in the weighted average tenor to 14 years from 11 years, the weighted average cut-off dipped to 7.42 per cent in the auction, down from 7.48 per cent in the auction last week, following softening in the yield of Government Securities (G-Secs) across tenors. As a result, the spread between the cut-off of 10-year state government securities and the new 10-year G-Sec yield eased mildly to 29 bps from 30 bps last week, the agency said.

An official from the finance ministry disclosed that the net collections have so far reached 34 per cent of the budgetary target

Railways, NHAI asked not to borrow from market

The government borrowing programme is scheduled to be completed in 26 weekly tranches of Rs 31,000-39,000 crore each

Sovereign yield curve seen steeper; short-term bonds may gain on likely RBI pivot

The fall in tax revenue and expected slowing economic growth next fiscal year will limit the government's ability to cut borrowing in the near term

Nevertheless, as a proportion of GDP, fiscal deficit is expected to ease to 5.8 per cent from 6.4 per cent