The Finance Ministry recently revealed that the centre plans to borrow Rs 7.5 lakh crore from the market through dated securities in the first half of the financial year 2025. This is 53.1% of the full-year target of Rs 14.13 lakh crore. The Centre has lowered its borrowing target for the first half, possibly due to the upcoming elections in April-May, which may slow down official spending. Experts believe that this lower borrowing target for the first half will have a positive impact on bond yields.

The government plans to raise Rs 12,000 crore of the projected borrowing through sovereign green bonds in the first half of FY25. The Centre has also introduced a new dated security with a 15-year tenor, based on market feedback and global practices. Last month, the government reduced the FY25 gross market borrowing target to Rs 14.13 lakh crore from Rs 15.43 lakh crore in FY24 as part of its fiscal consolidation drive.

The borrowing in the first half will be done in 26 weekly tranches, each ranging from Rs 20,000 crore to Rs 38,000 crore. The share of borrowing, including through the green bonds, under different maturities will be: 3-year (4.80%), 5-year (9.60%), 7-year (8.80%), 10-year (25.60%), 15-year (13.87%), 30-year (8.93%), 40-year (19.47%) and 50-year (8.93%).

The weekly borrowing through treasury bills in the first quarter of FY25 is expected to be Rs 27,000 crore for the first seven auctions and Rs 22,000 crore for the subsequent six auctions. There will be a weekly treasury bill issuance of Rs 12,000 crore under the 91-day category, Rs 7,000 crore under the 182-day, and Rs 8,000 crore under the 364-day brackets in the first seven auctions.