Today, the Government of India (GOI) has discussed with the Reserve Bank of India (RBI) to finalise its borrowing programme for the second quarter of FY 2022-23. 

Gross Market borrowing of Rs 14.31 lakh crore is projected for the current financial year; the GOI has decided to borrow Rs 14.21 lakh crore during the FY 2022-23. 

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Accordingly, the balance amount of Rs 5.92 lakh crore 41.7 per cent of Rs 14.21 lakh crore) is planned to be borrowed in the mid of the fiscal year 2022-23 (H2: FY 2022-23), which includes Rs 16,000 crore through the issuance of Sovereign Green Bonds (SGrBs) as per the announcement made in the Union Budget 2022-23. The gross market borrowing of Rs 5.76 lakh crore 40.5 per cent shall be completed.

On 29 September, the government slashed its market borrowing target for FY23 by Rs 10,000 crore, which would be enough to bear Rs 44,762 crore additional expense on free ration distribution.

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“Accordingly, the balance amount of Rs 5.92 lakh crore (41.7 per cent of Rs 14.21 lakh crore) is planned to be borrowed in the second half (H2) of the fiscal year 2022-23 through dated securities, including Rs 16,000 crore through issuance of Sovereign Green Bonds (SGrBs) as per the announcement made in the Union Budget 2022-23,” it said.

“Out of the Rs 1,00,000 crore of budgeted (BE) switch amount, Rs 56,103 crore of switch auctions have already been conducted, and the balance amount of switch auctions will be conducted in H2,” it said.

“The market borrowing will be spread over 2, 5, 7, 10, 14, 30 and 40 years securities. “The Reserve Bank may trigger fresh floatation of market loans when the government of India utilises 75 per cent of the WMA limit,” it said.

On WMA, the interest rate will equal the repo rate in the overdraft case, which will be two per cent above the repo rate.