Government to stick to its borrowing plan in September

5 Sep 2022 , 01:31 PM

Despite implementing a number of budgetary measures to reduce inflation, three officials told Reuters that Indian government will keep to its yearly market borrowing plan when the government unveils its October-March fiscal calendar at the end of this month. The government would borrow 8.45 trillion Indian rupees ($105.82 billion) by the end of September, which is less than the record-breaking borrowing amount of 14.31 trillion rupees ($179.20 billion) for the 2022—23 fiscal year beginning on April 1.

“We probably won’t increase borrowing this year. We should be able to absorb the income-expenditure we’ve already done while staying within the allocated budget, “The decision has not yet been made public, according to a senior government official who declined to provide his name. Despite implementing a number of budgetary measures to reduce inflation, three officials told news sources that India will keep to its yearly market borrowing plan when the government unveils its October-March fiscal calendar at the end of this month.

Another government insider, who also wished to remain unnamed, predicted that the government will unveil its first green bonds as part of its borrowing schedule for the second half of the fiscal year. Finance Minister Nirmala Sitharaman initially offered green bonds in the 2022—23 budget as a component of general market borrowing with the goal of using the money for the development of green infrastructure.

According to one of the officials, while planning its borrowing for the second half, the Indian government would not take bond index inclusion into account. Another government insider, who also wished to remain unnamed, predicted that the government will unveil its first green bonds as part of its borrowing schedule for the second half of the fiscal year.

The Indian government started thinking about including its debt in international indexes in 2019 and has spoken with J.P. Morgan, Bloomberg-Barclays, and Euroclear regarding clearing and settlement. According to media reports from last week, JP Morgan has reopened discussions with investors about including India in its developing market index, reigniting hopes that the country’s securities will soon be listed.

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