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Centre plans to borrow Rs 8.45 lakh crore in the first half (H1) of FY23.

The Ministry of Finance said the Centre is estimated to make a gross market borrowing of Rs 14.31 lakh crore for FY23. The Centre in consultation with the Reserve Bank of India, has finalised its borrowing programme for the first half (H1) of FY 2022-23.

As per Union Budget 2022-23, the budgeted gross market borrowing through dated securities for the FY 2022-23 is Rs 14,95,000 crore.

"Taking into account the switch operations conducted on January 28, 2022, the gross market borrowing through dated securities for the FY 2022-23 is expected at Rs 14,31,352 crore."

The ministry in a statement said: "The borrowing is scheduled to be completed in 26 weekly tranches of Rs 32,000-33,000 crore.

"The borrowing will be spread under 2, 5, 7, 10, 14, 30 and 40 year securities and Floating Rate Bonds of various tenors."

The statement cited that the Centre will continue to carry out "switching of securities" to smoothen the redemptions.

"To take care of temporary mismatches in Government account, the Reserve Bank of India has fixed the 'Ways and Mean Advances' (WMA) limit for H1 of FY 2022-23 at Rs 150,000 crore."

ICRA's Chief Economist Aditi Nayar said: "We had expected the GoI's market borrowing calendar to target raising of Rs 7.9 trillion gross G-sec in H1 FY2023, 55 per cent of the adjusted budgeted total for FY2023.

"Nevertheless, the announced amount is slightly less front-loaded than H1 FY2022, in which 62 per cent of the total FY2022 borrowing was raised, even though the amount is higher in absolute terms than H1 FY2022."

She said that once the borrowing calendar for FY2023 kicks off, "we expect the G-sec yields to start hardening in line with the global trends, even though the repo rate may not be hiked till August 2022".

"We expect the 10-year G-sec yield to cross 7 per cent over the next few weeks, and rise to as much as 7.4 per cent over the course of H1 FY2023."