The government on Friday said it will reduce the total borrowing for the current financial year by a massive Rs 1,20,494 crore than the budgeted estimate, as part of its debt-management strategy and <a href="https://www.mid-day.com/news/india-news/article/action-over-ambivalence-reform-over-rhetoric-nirmala-sitharaman-in-union-budget-2026-speech-23614662" target="_blank" rel="none noopener">fiscal prudence</a>, according to news agency PTI.
It plans to borrow Rs 7.86 lakh crore during the second half of the fiscal year, despite global challenges.&nbsp;
"During FY 2026-27, Government of India is expected to have market borrowing of Rs 15,99,506 crore through dated securities, as compared to Budget Estimates of Rs 17,20,000 crore for FY 2026-27," the Finance Ministry said in a statement.
"The Government of India, in consultation with the Reserve Bank of India (RBI), has decided to borrow Rs 7,86,000 crore in the second half (H2) of FY 2026-27. This includes Sovereign Green Bonds (SGrBs) issuance of Rs 15,000 crore," it added.
According to PTI sources, the net market borrowings (market borrowings for fiscal deficit financing) are kept at the budget levels, implying that inspite of the incipient <a href="https://www.mid-day.com/business/business-news/article/strong-government-divestments-could-ease-valuation-pressures-support-fiscal-consolidation-axis-capital-23649674" target="_blank" rel="none noopener">fiscal pressures</a>, the government is committed to the path of fiscal prudence laid out in the budget.
<h2>Government's borrowing plan</h2>
On the Rs 7.86 lakh crore borrowing, the government said it shall be completed through 23 weekly auctions.
"The market borrowing will be spread over securities of tenor 3, 5, 7, 10, 15, 30, 40 and 50 years. The share of borrowing (including SGrBs) under different maturities will be: 3-year (6.9 per cent), 5-year (12.1 per cent), 7-year (9.1 per cent), 10-year (26.3 per cent), 15-year (17.6 per cent), 30-year (9.2 per cent), 40-year (8.9 per cent) and 50-year (9.9 per cent).
During October 1, 2026 to December 31, 2016, the government is expected to borrow Rs 23,000 crore per week in 13 auction weeks through issuance of Treasury Bills (T-Bills).&nbsp;
"The break up would be Rs 8,000 crore under 91-day T Bills, Rs 8,000 crore under 182-day T-Bills and Rs 7,000 crore under 364-day T-Bills," it said.
"To take care of temporary mismatches in government accounts, if any, RBI has fixed the Ways and Means Advances (WMA) limit for H2 of FY 2026-27 at Rs 50,000 crore," the statement added.
<h2>Government will carry out switching and buyback of securities</h2>
To smoothen the redemption profile, the government said it will continue to carry out switching/buyback of securities.
The Government will continue to reserve the right to exercise <a href="https://www.mid-day.com/business/business-news/article/centre-raises-rs-3000-crore-from-6-per-cent-divestment-in-hindustan-copper-23646886" target="_blank" rel="none noopener">greenshoe option</a> to retain an additional subscription of up to Rs 2,000 crore against each of the securities indicated in the auction notifications.
<h2>What is greenshoe option?</h2>
A greenshoe option allows to raise more funds than initially planned, by issuing additional securities, in case of strong investor demand.
<h2>Government mobilisation</h2>
During the first half of the year ending September 30, the government would mobilise Rs 8,13,506 crore from bonds, slightly lower than the target of Rs 8.2 lakh crore, to fund the revenue gap, as per PTI.
<a href="https://www.mid-day.com/business/business-news/article/centre-achieves-78-per-cent-of-fy27-divestment-asset-monetisation-budget-target-in-five-months-23647177" target="_blank" rel="none noopener">The government has raised 62,124 crore this year through disinvestment and asset monetisation</a>, so far, achieving about 78 per cent of the FY27 target within five months.
The Centre's FY27 budgeted disinvestment estimate and asset monetisation target is Rs 80,000 crore and it has mopped up Rs 55,757 crore so far, this fiscal through divestment in public sector undertaking (PSU).
While presenting the Union Budget in February, Finance Minister Nirmala Sitharaman had proposed to borrow Rs 17.2 lakh crore to fund the fiscal deficit projected at 4.3 per cent of the GDP or Rs 16.9 lakh crore in absolute terms for 2026-27.
"To finance the fiscal deficit, the net market borrowings from dated securities are estimated at Rs 11.7 lakh crore. The balance financing is expected to come from small savings and other sources. The gross market borrowings are estimated at Rs 17.2 lakh crore," she had said.
(With inputs from PTI)

The Centre expects to have borrowing s of over Rs 15.99 lakh crore through dated securities as against the estimated Rs 17.20 lakh crore for FY27

Centre cuts FY27 borrowing by Rs 1.2 lakh crore to Rs 15.99 lakh crore

RBI bulletin: Indian economy performed well despite global headwinds

Government of India is expected to have market borrowing of Rs 15,99,506 crore through dated securities, as compared to Budget Estimates of Rs 17,20,000 crore for FY 2026-27

Centre cuts FY27 borrowing by Rs 1.2 lakh crore; to raise 7.86 lakh crore via securities from Oct

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Home / Business / Business News / Article / Centre cuts FY27 borrowing by Rs 1.2 lakh crore; to raise 7.86 lakh crore via securities from Oct