Govt. concludes G-Sec borrowing for FY24

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Last Updated28/02/2024

The government will not borrow through Treasury Bills “for the sake of borrowing” during the remaining period of the current fiscal, a senior Finance Ministry official said.

The government has completed G Sec borrowing for the current fiscal and it expects a dividend from the Reserve Bank of India in FY25, similar to FY24.
Meanwhile, the Finance Ministry official said 80% of capital expenditure and 79% of Revenue Expenditure has been completed as of early February and the expectation is to achieve RE by end March.
During the January-March quarter, the Government in consultation with RBI, planned to borrow ₹3.93 lakh crore through 13 weekly auctions of T Bills.
So far 8 auctions have been completed, while the plan is to raise ₹1.7 lakh crore via the remaining five auctions with the next one scheduled for Wednesday.

T Bill is an instrument which is issued at a discount while redeemed at par.
Since there is no coupon rate payable on such an instrument, the difference between discount price and face value is earning for the investors.
Such an instrument is issued in three maturities – 91 days, 182 days and 364 days.
At the same time, the government also goes for long-term borrowing with dated Government Securities (G Sec).
Maturity period for such a bond could be anywhere between 1 year and/or up to 50 years.
Such bonds carry interest rate and enjoy sovereign guarantee for principal and interest.
Borrowing through dated securities is part of government borrowing as mentioned in the budget and used to bridge the fiscal deficit.

Meanwhile, the government expects that its dividend income from the Reserve Bank of India for the current financial year ending March is to stay at levels similar to the last financial year.

The official said capital expenditure as a percentage of Revised Estimates (RE) has exceeded revenue expenditure.
The official hoped that RE for both expenditures will be met.