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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