BUDGET
Govt to switch INR 2.5 tln of gilts FY27 vs INR 1.64 tln FY26
This story was originally published at 13:55 IST on 1 February 2026
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NEW DELHI/MUMBAI – The government aims to conduct gilt switches worth a record INR 2.50 trillion in the next fiscal year starting April, according to the Union Budget for 2026-27 (Apr-Mar) presented by Finance Minister Nirmala Sitharaman in the Lok Sabha Sunday. A switch operation entails replacing a security maturing in the near term with a longer-maturity paper, effectively delaying the government's debt repayment.
The revised estimate shows the government aims to switch gilts worth INR 1.64 trillion in FY26, against the Budget estimate of INR 2.50 trillion. The government has switched short-term bonds worth INR 1.27 trillion through auctions to market participants in Apr-Dec. It also conducted a bilateral switch of two bonds worth INR 373 billion maturing in FY27 with the Reserve Bank of India in May, bringing the total amount to INR 1.64 trillion.
Informist had reported that the government would not conduct any more switch auctions in the current fiscal, having met its full-year target through a combination of gilt switches and buybacks. The government bought back INR 867.75 billion worth of FY27 bonds through auctions in June and July. Its revised estimate for buybacks is INR 867.75 billion and it has not budgeted for buybacks in FY27. The government has kept its budget estimate for buybacks at nil in FY25 and FY26, but bought back over INR 860 billion of bonds in both years.
Analysts had expected the government's Budget estimate for switches to be similar to the current financial year. End
Reported by Aaryan Khanna and J. Navya Sruthi
Edited by Saji George Titus
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