India Plans to Raise Rs 20,000 Crores with Green Bonds in 2025
The Indian government has announced plans to collect Rs 20,000 crores through ‘Sovereign Green Bonds’ in the second half of the financial year 2025. According to the Finance Ministry, the borrowing will be completed through 21 weekly auctions.
Green Bond Issuance Schedule
The green bonds will be issued in four tranches of Rs 5,000 crore each:
- The first 10-year bond will be issued from November 25 to 29, 2024.
- The second 30-year bond will be issued from December 9 to 13, 2024.
- The third 10-year bond will be issued from January 27 to 31, 2025.
- The final 30-year bond will be issued from February 17 to 21, 2025.
These bonds will fund projects that help India transition to a low-carbon economy.
Additional Borrowing Plans
The government also plans to borrow Rs 19,000 crores through Treasury Bills during the third quarter of FY25. To address temporary mismatches in government accounts, the Reserve Bank of India has set the Ways and Means Advances limit at Rs 50,000 crores for the second half of FY25.
For the entire FY25, the government has budgeted a gross market borrowing of Rs 14.01 lakh crores, with Rs 6.61 lakh crores planned to be raised in the second half of the fiscal year.
Doubts Revealed
Rs 20,000 Crores -: Rs 20,000 crores is a way to say 20,000 times 10 million rupees. It’s a very large amount of money.
Green Bonds -: Green Bonds are special types of loans that the government takes to fund projects that help the environment, like clean energy or planting trees.
Sovereign Green Bonds -: Sovereign Green Bonds are Green Bonds issued by the government itself, meaning the government promises to pay back the money.
Financial Year 2025 -: The financial year 2025 is a period used for accounting and budgeting, starting from April 1, 2024, to March 31, 2025.
Tranches -: Tranches are parts or portions of something. Here, it means the bonds will be issued in four separate parts.
10-year bond -: A 10-year bond is a type of loan that the government will pay back over 10 years.
Treasury Bills -: Treasury Bills are short-term loans that the government takes and promises to pay back within a year.
Ways and Means Advances -: Ways and Means Advances are short-term loans that the government can take from the Reserve Bank of India to meet its immediate cash needs.