INDIA BUDGET-Govt to borrow 14.13 trln rupees in 2024/25, bond yields plunge

The market borrowings will be used to fund a fiscal deficit, which has been pegged at 5.1% of gross domestic product (GDP). The government plans to conduct switch auctions worth 1 trillion rupees during the year to swap bonds expiring in the near term with longer-tenor securities, according to budget documents.

The Indian government will borrow a gross of 14.13 trillion rupees ($170.36 billion) in the fiscal year starting April 1, compared with 15.43 trillion rupees for the current fiscal, Finance Minister Nirmala Sitharaman said on Thursday.

Net borrowings are pegged at 11.75 trillion rupees for the next financial year, largely unchanged as compared to the current financial year. The gross borrowing is lower than economists' estimate of 15.6 trillion rupees, according to a Reuters poll.

India's 10-year benchmark yield fell as much as eight basis points to 7.0511%, after the sharply lower-than-expected target for borrowings. The market borrowings will be used to fund a fiscal deficit, which has been pegged at 5.1% of gross domestic product (GDP).

The government plans to conduct switch auctions worth 1 trillion rupees during the year to swap bonds expiring in the near term with longer-tenor securities, according to budget documents. Apart from market borrowings, the government will raise 4.66 trillion rupees through India's small savings fund to finance the year's budget gap.

($1 = 82.9400 Indian rupees)