Government unveils record borrowing plan; Fy23 Bond Sales Estimated at Rs 15 Lakh Crore

The 2022 Union Budget, presented by Finance Minister Nirmala Sitharaman on Tuesday, unveils the government’s plans to sell a record amount of bonds in the 2023 financial year.

According to budget documents, the government plans to sell bonds worth about 15 trillion rupees ($200 billion) in FY23. Net borrowings for FY23 are estimated at 11 .2 trillion rupees.

“As part of the government’s global market borrowing in 2022-23, sovereign green bonds will be issued to mobilize resources for green infrastructure. The proceeds will be deployed in public sector projects that contribute to reducing carbon intensity economy,” FM Sitharaman said in his budget speech.

The government announced Rs 1 lakh crore to help states in FY23 “to catalyze overall investment in the economy”. These fifty years of interest

the free loans are in addition to normal borrowing allowed from states, the FM said.

Total expenditure in 2022-23 is estimated at Rs 39.45 lakh crore, while total revenue other than borrowing is estimated at Rs 22.84 lakh crore.

One of the important things to watch out for in a budget document is government borrowing. This is the borrowing that the government contracts when it lacks revenue – tax and non-tax – to finance its expenditures. The government’s annual borrowing program includes borrowing through the issuance of securities such as G-secs and treasury bills. While the main source of its borrowing is the market, it also borrows from small savings banks, state provident funds, etc.

But like any other debt, the government is also responsible for paying public debt with interest. The government promises to pay the initial principal plus interest when the security matures, although some securities also offer periodic coupon or interest payments.

Just like other securities, rating agencies also rate these government debt instruments.

In the Union Budget 2021 announced in February last year, the government had forecast gross market borrowing at Rs 12.05 lakh crore for the current financial year. While Rs 7.24 lakh crore, 60% of the total amount, was to be borrowed in the first half (H1), the rest was to be borrowed in the second half (H2).

The government’s actual borrowing in the first half was Rs 7.02 lakh crore. In September, the government issued a statement indicating that it planned to borrow the remaining Rs 5.03 lakh crore from H2.

“The H2 projection of FY 2021-22 also takes into account balance release requirements to states due to the back-to-back loan facility in lieu of GST offset during the year,” it said. he declares.

First post: STI

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