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The Central government, in consultation with the Reserve Bank of India (RBI), has finalised its borrowing programme for the second half (H2) of FY 2021-22.

Out of gross market borrowing of Rs 12.05 lakh crore projected for FY22 in the Union Budget, Rs 7.24 lakh crore (60 per cent) was planned to be borrowed in first half (H1). The effective borrowing in H1 of FY 2021-22 was, however, Rs 7.02 lakh crore.

The government now plans to borrow the balance Rs 5.03 lakh crore in the second half year (H2) of FY 2021-22. The H2 FY 2021-22 projection also factors requirements for release of balance amount to states on account of back-to-back loan facility in-lieu of GST compensation during the year.

Borrowing in H1 has been completed smoothly with weighted average yield at 6.19 per cent and weighted average maturity at 16.69 years. In H1, good demand for government bonds was seen from all major investor segments and the yields have remained stable.

The government's H2 borrowing amounting to Rs 5.03 lakh crore is likely to be conducted in 21 weekly tranches of Rs 24,000/23,000 crore. Borrowing will be spread under 2, 5, 10, 14, 30 and 40 year-securities and Floating Rate Bonds (tenor of 7-8 & 13 years).

The share of borrowing under different maturities will be: 2 years - 4 per cent, 5 years - 11.9 per cent, 10 years - 28.4 per cent, 14 year - 17.9 per cent, 30 years - 13.9 per cent, and 40 years - 15.1 per cent. Borrowing under Floating Rate Bonds will be 8.8 per cent.

The government will issue another Floating Rate Bond of 7-8 years, in addition to 13-year. Both will be issued on an alternate basis.

Government will continue to carry out switching of securities to smoothen redemptions in coming years.

Weekly borrowing under Treasury Bills in Quarter 3 of FY 2021-22 is expected to be Rs 20,000 crore with net borrowing of (-) Rs 1.04 lakh crore during the quarter. There will be issuance of Rs 10,000 crore under 91 DTBs, Rs 3,000 crore under 182 DTBs, and Rs 7,000 crore under 364 DTBs during the quarter.

To take care of temporary mismatches in government accounts, the RBI has fixed the Ways and Mean Advance (WMA) limit for H2 at Rs 50,000 crore.