The government has announced its borrowing calendar saying that it will borrow a majority of its fund requirements for 2015-16 in the first half of the fiscal, raising Rs 3.6 lakh crore from the market between April and September 2015. This amounts to 66.7 per cent of the targetted gross market borrowing of Rs 6 lakh crore in 2015-16. It also announced measures to smoothen the management of government debt including framing of guidelines to reduce the pressure of repayment of loans raised earlier.
Finance Secretary Rajiv Mehrishi has said that the government also plans to raise long term bonds of 40-year duration from the market. "We will issue long-term bonds of 40 years in early next financial year. It will help us in the long run and will provide stability in the system." Mehrishi further stated that the Central Government would be borrowing about Rs 17,000-18,000 crore through bonds every week. The borrowing in the first half of the next fiscal will be raised from the market through bonds during the year. After deducting the repayments of loans maturing in the April-September period, the net borrowings of the government during the period will be Rs 2.25 lakh crore.
The calendar for market borrowing was decided at a meeting between officials of the Finance Ministry and Reserve Bank (RBI). It was also decided that in the next financial year the government would exchange Rs 50,000 crore worth of bonds that are maturing in the next two to three years with bonds of longer tenor. This will reduce the amount of loan that the government will have to repay during the period. The government would come out with a concept paper for switching of bonds in the coming days that would lay out the principle on which it would be done in future.
The government, as per the budget papers, plans to borrow Rs 6 lakh crore from the market in the next fiscal, up from Rs 5.92 lakh crore in 2014-15. However, the net borrowings in 2015-16 will be Rs 4.56 lakh crore, after considering repayments of past loans and interest, as per budget documents.