India’s Finance Ministry Plans Rs 6.61 Lakh Crore Borrowing for Second Half of 2024-25
The Ministry of Finance in India has announced that out of the total Rs 14.01 lakh crore budgeted for 2024-25, Rs 6.61 lakh crore will be borrowed in the second half of the year. This borrowing will be done through the issuance of dated securities, including Rs 20,000 crore in Sovereign Green Bonds (SGrBs).
The government, in consultation with the Reserve Bank of India, has finalized its borrowing program for the second half of 2024-25. The borrowing will be completed through 21 weekly auctions and will be spread over various maturities, including 3, 5, 7, 10, 15, 30, 40, and 50-year securities.
| Maturity | Share of Borrowing |
|---|---|
| 3-year | 5.3% |
| 5-year | 10.6% |
| 7-year | 7.6% |
| 10-year | 24.8% |
| 15-year | 13.2% |
| 30-year | 12.1% |
| 40-year | 15.9% |
| 50-year | 10.6% |
The Ministry of Finance also mentioned that the government reserves the right to use a greenshoe option to retain an additional subscription of up to Rs 2,000 crore against each of the securities indicated in the auction notifications.
Doubts Revealed
Finance Ministry -: The Finance Ministry is a part of the government that handles money matters, like taxes and spending.
Rs 6.61 Lakh Crore -: Rs 6.61 Lakh Crore is a very large amount of money. ‘Lakh’ means 100,000 and ‘Crore’ means 10 million. So, Rs 6.61 Lakh Crore is 6,61,00,00,00,000 rupees.
Borrowing -: Borrowing means taking money from others with a promise to pay it back later.
Second Half of 2024-25 -: This means the last six months of the financial year 2024-25, which is from October 2024 to March 2025.
Dated Securities -: Dated securities are a type of loan where the government promises to pay back the money on a specific date in the future.
Sovereign Green Bonds -: These are special loans the government takes to fund projects that help the environment, like clean energy.
Maturities -: Maturities are the lengths of time until the borrowed money has to be paid back. It can be from 3 years to 50 years.
Weekly Auctions -: Weekly auctions are events where the government sells its loans to people or companies every week.
Greenshoe Option -: A greenshoe option allows the government to borrow a little more money than planned if there is a lot of interest from buyers.
