Indian Government to Borrow ₹6.77 Lakh Crore in H2FY26, ₹10,000 Crore via Sovereign Green Bonds

The Indian government has fixed its borrowing at ₹6.77 lakh crore for the second half of FY26, through dated securities. This is slightly lower than the ₹6.82 lakh crore raised in the same period last year. For the full year, the borrowing estimate now stands at ₹14.72 lakh crore, compared with the earlier figure of ₹14.82 lakh crore.

Out of the total H2 borrowing, ₹10,000 crore will be raised via Sovereign Green Bonds. The proceeds will be used to fund projects classified as environmentally sustainable.

Auction Plan

Borrowings will take place through 22 weekly auctions, beginning in October and running until 6 March 2026. Securities will range from 3 to 50 years. The share of each maturity is 3-year (6.6%), 5-year (13.3%), 7-year (8.1%), 10-year (28.4%), 15-year (14.2%), 30-year (9.2%), 40-year (11.1%), and 50-year (9.2%). The government has allowed a greenshoe option of up to ₹2,000 crore per security.

Treasury Bills and WMA

In the third quarter of FY26, the government will issue ₹19,000 crore worth of Treasury Bills each week. This includes ₹7,000 crore of 91-day bills, ₹6,000 crore of 182-day bills, and ₹6,000 crore of 364-day bills. The Ways and Means Advances limit for H2FY26 has been set by the Reserve Bank of India at ₹50,000 crore.

Fiscal Indicators

India’s fiscal deficit target for FY26 is 4.4% of GDP. Retail inflation for August was reported at 2.07%. The government expects inflation to remain moderate, supported by tax cuts on food and essential household goods.

Read More: SBI Raises $500 Million at Record-Low Borrowing Cost After India’s Rating Upgrade!

Conclusion

The borrowing programme for H2FY26 outlines a structured plan with dated securities across maturities, inclusion of green bonds, and weekly Treasury Bill issuance, keeping the overall borrowing slightly below last year.

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