Govt Bonds
Met FY26 switch, buyback aim, won't conduct more auctions, says govt official
This story was originally published at 20:14 IST on 17 January 2026
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By Aaryan Khanna
NEW DELHI – The government has met its target for switches and buybacks in the current financial year that began in April and will not conduct any further auctions to switch government bonds, a senior finance ministry official told Informist. The Centre had pegged its bond switches at a record INR 2.5 trillion but had not provisioned for buybacks in the Union Budget for FY26.
The government has switched short-term bonds worth INR 1.27 trillion through auctions with market participants. It also conducted a bilateral switch with the Reserve Bank of India in May to switch INR 373 billion of two bonds maturing in FY27, bringing the total amount to INR 1.64 trillion. A switch operation entails replacing a security maturing in the near term with a longer-maturity paper, effectively postponing the government's debt repayment to a later date.
The Centre had also bought back INR 867.75 billion of government bonds maturing in FY27 through a series of auctions in June and July, bringing the total of the switch and buyback to INR 2.51 trillion. The government usually considers switches and the buybacks to be part of the same target in bringing down its redemptions, since buybacks are dependent on the government's cash position, the official said. In FY25, the government switched INR 1.47 trillion of gilts while buying back INR 881.64 billion of bonds maturing in FY26.
With the government's switches done, latest RBI data shows 10 gilts worth INR 5.47 trillion are set to mature in FY27. Market participants expect the government's net borrowing aim in the Union Budget for FY27 to be between INR 11.5 trillion and INR 12.0 trillion, bringing the gross borrowing programme to a record INR 17 trillion or higher. End
Edited by Ashish Shirke
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