The Centre is planning to borrow Rs 8.45 lakh crore (trillion) in the first half of 2022-23, which is 59.04 per dent of the planned gross borrowing for the year.
Although the sum is largely in line with the front-loading done during the first half in the past few years, the bond markets will brace for higher yields as they are confronted not only by a record borrowing but also other headwinds such as firm crude oil prices and rising inflation .
The Centre usually borrows around 60 per cent of its budgeted sum in the first half of the fiscal. In 2020-21, it had borrowed Rs 7.24 lakh crore in the April-September period which amounted to 60 per cent of the total gross borrowing of Rs 12.05 lakh crore for the fiscal.
For 2022-23, finance minister Nirmala Sitharaman had set the gross borrowing at Rs 14.31 lakh crore.
Given the huge supply of papers in 2022-23, bond market participants were looking forward to some moderation and they were reportedly expecting 50-55 per cent of the gross borrowing to be done in the first half.
Yields — which move in opposite direction to bond prices — on the benchmark 10-year security on Thursday settled higher at 6.84 per cent against the previous close of 6.78 per cent.
In 2021-22, the yields have risen by 66 basis points. Experts feel that they are set to cross the 7-per-cent mark over the coming days.
Announcing the borrowing calendar for April-September 2022, the government said it will be completed in 26 weekly tranches of Rs 32,000-33,000 crore. In April, Rs 1.30 lakh crore is proposed to be borrowed through papers ranging from 2-40 years and floating rate bonds.
The borrowing will be spread under 2, 5, 7, 10, 14, 30 and 40 year securities and floating rate bonds (FRBs) of various tenors.
The share of borrowing under different maturities will be two year (6.15 per cent), 5 year (13.85 per cent), 7 year (10.77 per cent), 10 year (20 per cent), 14 year (15.98 per cent), 30 year (13.25 per cent), 40 year (13.85 per cent) and FRBs at 6.15 per cent.
Weekly borrowing under treasury bills during the first quarter is expected to be Rs 33,000-34,000 crore.
