Government to borrow Rs 8.20 lakh crore in H1 FY27: What does it signal for India’s economy?

New Delhi: The Indian government has announced that it will borrow Rs 8.20 lakh crore during the first half (April–September) of the financial year 2026-27, in consultation with the Reserve Bank of India (RBI), the Finance Ministry said on Friday.

The gross market borrowing for FY 2026-27 was initially set at Rs 17.20 lakh crore in the Budget Estimate, which has been revised to Rs 16.09 lakh crore after the conduct of G-Sec switches. The planned H1 borrowing accounts for 51 per cent of the total requirement.

Borrowing will be executed through the issuance of dated securities, including Rs 15,000 crore in Sovereign Green Bonds (SGrBs), across 26 weekly auctions.

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The government will issue securities across multiple tenures to manage debt efficiently, with allocations as follows: 3-year: 8.1%; 5-year: 15.4%; 7-year: 8.1%; 10-year: 29%; 15-year: 14.5%; 30-year: 7.3%; 40-year: 8%; 50-year: 9.6%.

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The government also plans to buy back securities to smooth the redemption profile and may exercise the greenshoe option, allowing an additional subscription of up to Rs 2,000 crore per security.

In addition, weekly issuance of Treasury Bills (T-Bills) in the first quarter of FY 2026-27 is expected to total Rs 24,000 crore, with allocations of Rs 12,000 crore for 91-day T-Bills, Rs 6,000 crore for 182-day T-Bills, and Rs 6,000 crore for 364-day T-Bills.

To manage temporary mismatches in government accounts, the RBI has fixed the Ways and Means Advances (WMA) limit at Rs 2.50 lakh crore for the first half of FY 2026-27.

IANS