Borrowings calender for FY20 to be out today: Here is what you should expect

The Finance Ministry will announce its borrowing plans for the first half of 2019-20 on Friday as it has received the Election Commission`s nod to go ahead with the announcement. The approval from Election Commission has come, and the Department of Economic Affairs (DEA) secretary will lay out the ways and means of fund raising from the market later in the day. Market sources have said that the Ministry could go for about 60 per cent borrowing for 2019-20 (April-March) in the first half of the year.

The Ministry may borrow around 60 per cent of the Rs 7.1 lakh crore budgeted gross borrowings for fiscal 2019-20 in its first half (H1) from the market to meet part-redemption, expenditures for welfare schemes and keep the fiscal deficit in check.

"H1 borrowing could be 50-60 per cent of the gross borrowing. We are looking at a borrowing of about Rs 4.3 lakh crore in H1," said a source. Typically, the government conducts around 60 per cent of its borrowing in April-September. The government is scheduled to borrow Rs 7.10 lakh crore on a gross basis in the next financial year. 

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However, it had scheduled only 47.6 per cent of its budgeted borrowing in the first half of this year because of volatility in the bond market.

The focus of H1 borrowing for 2019-20 will be the 10-14 year segment, not the short-term bonds of three-five years in the first half of 2018-19. The government had borrowed just 47.5 per cent of its budgeted full-year target (gross) through bonds in the first half of 2018-19 -- much lower than the 60-65 per cent in the corresponding period over the previous five years -- and had dipped more into the National Small Savings Fund (NSSF) to finance the fiscal deficit as it sought to ease pressure on the bond market that has witnessed a spurt in yield then.

This may not happen this fiscal as this is a poll year and expenditures related to welfare schemes like the direct income for farmers will be executed in the first half, so funds would be needed even though these are budgeted expenditures.