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Informist, Wednesday, Mar. 25, 2026

 

--Govt source: May raise 53-58% of FY27 gross borrowing in Apr-Sept

 

By Sagar Sen

 

NEW DELHI – The government may raise 53-58% of its gross borrowing target for 2026-27 (Apr-Mar) in the first half of the financial year, a government official said. Based on an effective gross borrowing aim of INR 16.09 trillion, this would imply government bond issuances between INR 8.53 trillion and INR 9.33 trillion in Apr-Sept.

 

This year, the government had pegged its Apr-Sept borrowing calendar at INR 8.00 trillion, or 53.98% of the FY26 gross borrowing target. Earlier Wednesday, Informist reported quoting a finance ministry official that the calendar for FY27 is likely to be released after market hours Friday.

 

The government has projected gross market borrowing through dated securities in FY27 at INR 17.20 trillion. However, the government switched securities worth INR 1.11 trillion after the presentation of the Budget on Feb. 1, which has brought down the repayment estimate for the next fiscal year to INR 4.36 trillion from INR 5.47 trillion.

 

In their meetings with the Reserve Bank of India, market participants had recommended that the government borrow 53–55% of the estimated figure in the first half of the financial year. The RBI holds a meeting with market participants to gauge demand before finalising the half-yearly borrowing calendar. It had conducted these meetings in February. Some investors had also proposed a move to uniform price auctions rather than multiple-price auctions for government bonds.

 

The government official Wednesday indicated that the government may look at raising more funds in Apr-Sept compared with last year as there is a possibility of interest rates going up because of the ongoing war in West Asia.

 

According to a poll by Informist, economists expect the RBI's Monetary Policy Committee to raise the repo rate by up to 50 basis points from the current 5.25% in the current calendar year in case the war continues through 2026.

 

Economists also said that rising energy prices due to the West Asia war may impact India's inflation. Even before the war broke out, CPI inflation was expected to rise to around 4% in FY27. In case energy prices globally remain at higher levels for an extended period, with both supply and output severely affected, average inflation may rise close to 6%, the upper bound of the RBI's tolerance band.

 

Moreover, market participants expect the borrowing pattern in Apr-Sept to be similar to that of Oct-Mar, referring to the tenures of bonds, their weightage in the calendar and practice of issuing a bond of a particular tenure once every four weeks.  End

 

Edited by Ashish Shirke

 

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