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Informist, Tuesday, Jul 23, 2024

--BUDGET: FY25 net short-term borrowing pegged at (-)500 bln rupees

--CONTEXT: Interim Budget saw FY25 net short-term borrow 500 bln rupee

MUMBAI – The government has pegged short-term borrowing in 2024-25 (Apr-Mar) at (-)500 bln rupees against 500 bln rupees in the Interim Budget, a downward revision of 1 trln rupees. In 2023-24, the government net raised 483.49 bln rupees through Treasury bills, less than a budgeted 500 bln rupees.

Typically, the government has a large net borrowing in the Apr-Jun quarter, before running that down in the remainder of the financial year. For the Apr-Jun quarter, the government had cut its borrowings through the issuances of T-bills by 600 bln rupees as its cash pile increased to nearly 5 trln rupees during the Model Code of Conduct imposed during the General Elections that ended last month. This had reduced the need for short-term borrowing.

So far in the current financial year, cut-offs on T-bills have eased 21-30 basis points at auctions, helped by the borrowing cut and increase in banking system liquidity. Any substantial fall from here is not likely to happen until the borrowing calendars for the remaining quarters are announced, dealers said.

Following are key details of the net borrowing through T-bills. All amounts in bln rupees:

End

Reported by Anupreksha Jain

Edited by Ashish Shirke

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