The Government for the second half of financial year 2015-16 has cut market borrowing target by Rs 15,000 crore. This amount will be raised through the Sovereign Gold Bond and Gold Monetisation Scheme, with no any impact on the overall borrowing, as this is merely substitution of one borrowing with another.
As per the RBI statement, the Government will raise Rs 2.49 lakh crore through market borrowings in the second half of the current fiscal. Out of which Rs 2.34 lakh crore will be raised through issue of Treasury Bills while Rs 15,000 crore would be raised through sovereign gold bonds. The government plans to borrow a total of Rs 6.01 lakh crore from the market this fiscal. For the first half of the financial year, it has borrowed about Rs 3.5 lakh crore, which is over 50 per cent of the annual target.
The government has budgeted gross and net market borrowing for FY16 at Rs 6 lakh crore and Rs 4.56 lakh crore, respectively. The second half borrowing programme was decided at a meeting chaired by Economic Affairs Secretary Shaktikanta Das. The government borrows money from the market through T-bills and other instruments to fund its fiscal deficit.
According to the government’s public debt management report released for the second quarter, the total public debt (excluding liabilities under the 'Public Account') of the Government increased to Rs 5,412,171 crore at end-September 2015 from Rs 5,301,394 crore at end-June 2015, increase of 2.1 per cent compared with an increase of 3.2 per cent in the previous quarter. Internal debt constituted 92.1 per cent of public debt, as compared with 92.3 per cent in the previous quarter.