30 Jan 2023

Gross Centre plus state borrowing at Rs 24 trillion in budget 2023-24

For FY24, it is expected that the domestic fiscal deficit will be budgeted at 5.5%-6.1% of GDP. Gross market borrowing is expected to stand at around Rs 16 trillion while including SDL borrowing, it is expected to cross Rs 24 trillion for next fiscal year. It can be noted that Rs 4401.29 billion government bonds are to be matured in FY24.

author dp
Team INRBonds
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Possible pattern of fiscal deficit funding during FY24

Sources

% of fiscal deficit

Market Borrowings (G-sec +T Bill)

65%-70%

NSSF

15%-20%

State Provident Funds

2%-2.5%

External Debt

0.5%-0.6%

Other sources

5%-7%

Salient features of FY23 BE

  • For FY23, fiscal deficit has been budgeted at 6.4% of GDP
  • Gross market borrowing has been set at Rs 14950 billion for the current fiscal year.

Market borrowing during FY23

During the current fiscal year, the union government has borrowed a gross amount of Rs 12810 billion (including green bonds) as of 27th Jan 2023 against budgeted borrowing amount of Rs 14950 billion for FY23.

 

Gross Borrowing (Rs billion)

Union Government

12810

States

5093

Government bonds, SDL and OIS yield movements

10-year benchmark 7.26% 2032 yield rose by 4 bps to 7.39% while 6.54% 2032 yield increased by 4 bps to 7.41%. The 5-year benchmark bond, 7.38% 2027 yield increased by 3 bps to 7.2%. 3-year benchmark 5.22% 2025 yield increased by 10 bps to 7%. Long-term paper, 7.40% 2062 yield increased by 1 bp to 7.45%.

The spread of 10-year bond over 5-year bond rose to 19 bps from 18 bps as compared to the previous week. The 15-year benchmark over 10-year benchmark spread increased to 7 bps from 5 bps while the 30-year benchmark over 10-year benchmark spread increased to 7 bps from 5 bps on a weekly basis.

On a weekly basis, 1-year OIS yield rose by 7 bps to 6.71% while the 5-year OIS yield increased by 9 bps to 6.22%.

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