More Stories

Informist, Friday, Feb. 6, 2026

 

Please click here to read all liners published on this story

--RBI Malhotra: Not right way to look at gross govt borrowing
--RBI Malhotra: More govt bond redemptions this year than last year
--RBI Malhotra: FY27 net borrowing increase is only INR 200 bln over FY26
--RBI Malhotra: Growth in net mkt borrow much less than one would expect
--RBI Malhotra: T-bill borrowing to help manage yield curve better
--RBI Malhotra: Budget numbers for small savings quite conservative
--RBI Malhotra: Govt should be able to raise resources at reasonable prices
--RBI Malhotra: Govt borrowing programme is on the lower side
--RBI Malhotra: Budget number has gone up quite a bit, but not net borrowing
--RBI Sankar: Bond buybacks get factored in during the course of year
--RBI Sankar: Rise in govt borrow not significant 
--RBI Sankar: Certain that RBI will manage govt borrowing efficiently 

 

MUMBAI – The Reserve Bank of India will be able to manage the government's record borrowing programme for 2026-27 (Apr-Mar) quite efficiently, the central bank's top officials said during a post-policy press conference on Friday.

 

The government has pegged its gross market borrowing at a record INR 17.20 trillion in FY27 in the Union Budget presented Sunday, up from INR 14.61 trillion in the revised estimate for the financial year ending March. The on-year rise in gross borrowing is not significant at all when placed in a historical context, RBI Deputy Governor T. Rabi Sankar said. He drew a comparison to the period between FY20 and FY23, during which the market borrowing more than doubled to nearly INR 15 trillion from around INR 7 trillion.

 

"...the borrowing programme the government is looking (at) is much on the lower side and they should be able to raise these kind of resources at very reasonable prices," RBI Governor Sanjay Malhotra said at the press conference.

 

The governor also stressed the need to focus on net market borrowing rather than gross market borrowing, which had risen due to the increase in repayments. Net market borrowing was pegged at INR 11.73 trillion in FY27 from a Budget Estimate of INR 11.54 trillion for FY26 and a revised estimate of INR 11.33 trillion. Budgeted repayment rose to around INR 5.5 trillion from around INR 3.3 trillion the previous year. Economic Affairs Secretary Anuradha Thakur had also termed the borrowing plan as "not high" and said the government had a plan to manage its repayments. 

 

Treasury bills will also help in managing the yield curve better, while the government's projections for borrowing from the national small savings fund were conservative, Malhotra said. In FY27, the government projects net T-bill issuance at INR 1.3 trillion, compared with nil for FY26. Small savings borrowing is seen only 4% higher on year at INR 3.86 trillion in FY27, and it is budgeted to fund only 22.8% on the fiscal deficit in FY27, down from 23.9% in the revised estimate for the current fiscal. 

 

Asked about switches and buybacks of government bonds, Sankar said that buybacks from the government would get factored in over the course of the fiscal year. The government had set a gilt switch target of INR 2.50 trillion in FY27, the same as in FY26, but did not provision for buybacks. It did not conduct a gilt switch auction in January after having met its gilt switch target of INR 2.50 trillion for FY26 through market switches and gilt buybacks in Apr-Dec. The government had not accounted for buybacks in the last two financial years, but bought back INR 867.76 billion in FY26 and INR 881.64 billion in FY25 of gilts maturing in subsequent years.

 

The central bank officials did not comment further on gilt switches. Some market participants had expected the RBI and the government to conduct another bilateral switch for the RBI's bondholdings maturing in FY27 to bring down the scheduled redemptions, either before or after the presentation of the Budget. The RBI switched INR 373 billion of bonds maturing in FY27 with the government in May.

 

The Monetary Policy Committee Friday left the policy repo rate unchanged at 5.25% in a unanimous decision. The committee also retained the 'neutral' policy stance even as external member Ram Singh was of the view that the stance be changed to 'accommodative' from neutral. Despite the comments from RBI officials on the borrowing programme and on being proactive and pre-emptive in managing liquidity, the 10-year benchmark gilt yield rose 10 basis points to 6.75%, as of 1534 IST.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Aaryan Khanna

Edited by Tanima Banerjee

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.