The government will front-load a bulk of its borrowing for 2021-22, and is confident that the Reserve Bank of India will manage to help raise the funds at reasonable rates, a top finance ministry official said on Wednesday.
“In the Budget, we had announced a gross borrowing of ₹12,05,500 crore and a net borrowing of ₹9,37,221 crore,” said Economic Affairs Secretary Tarun Bajaj.
“In the first half of the year, for which the detailed calendar is being released today, we will be borrowing ₹7.24 lakh crore... which is 60.06% of the gross issuances in 2021-22,” he added.
The borrowings would be done across tenures ranging from two years to 40 years, Mr. Bajaj said. He added that any review of the borrowings plan would only be conducted later in the year depending on how the tax and non-tax revenue streams panned out.
Despite record government borrowings in 2020-21, yields ‘generally remained very stable’, Mr. Bajaj said, but admitted “there was an issue in the last few auctions that happened in the month of March.”
On whether the government was concerned about the possibility of paying higher rates for its borrowings in the coming year in the light of some recent securities auctions being cancelled, the Secretary said: “I have been in touch with the RBI as usual and I had a meeting with the central bank again before announcing the borrowing calendar.
“I am sure they would take appropriate action in the market to ensure that yields remain within reasonable limits and I have no reason to believe anything else,” he added.
