Budget Discussion
Gilt buybacks in FY25 helped save INR 50 bln in interest payment, says Sitharaman
This story was originally published at 17:32 IST on 13 February 2025
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--Sitharaman: FY25 gilt buybacks helped save INR 50 bln in interest payment
--CONTEXT: Sitharaman replying to Budget FY26 discussion in Rajya Sabha
NEW DELHI – The gilt buyback operations carried out by the finance ministry in 2024-25 (Apr-Mar) helped the government save about INR 50 billion in interest payments, Finance Minister Nirmala Sitharaman said Thursday.
The government reintroduced buybacks in FY25 after a gap of six years to reduce its outstanding debt.
The Budget for FY26 has projected the revised estimate for interest payments in FY25 at INR 11.38 trillion, down from INR 11.63 trillion in the Budget estimate.
The gilt buyback auctions also helped the government inject liquidity into the banking system, Sitharaman said replying to a discussion on the FY26 Budget in Rajya Sabha. The Budget has estimated the total buyback of gilts in FY25 at INR 881.64 billion.
"Similarly, one other measure we have brought in was short-term treasury bill borrowings have been drastically reduced. This has contributed greater liquidity in the financial system." The Budget has cut the revised estimate for net short-term borrowing in FY25 to (-)INR 1.2 trillion from (-)INR 500 billion in the Budget estimate. End
Reported by Krity Ambey
Edited by Saji George Titus
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