Centre’s Borrowing Plan for H2FY26 Fixed at ₹6.77 Lakh Crore

The Centre has announced a borrowing plan of ₹6.77 lakh crore for the second half of FY26, covering the period from October to March. According to the borrowing calendar released on September 26, the funds will be raised through dated securities, with long-term bonds comprising the bulk of the issuances. The plan also includes a ₹10,000 crore issuance of sovereign green bonds, showing the government’s commitment to green financing.

Auction Schedule and Structure

The borrowing plan for H2FY26 outlines 22 auctions from September 29, 2025, to March 6, 2026. The first auction will raise ₹32,000 crore via 10-year Government of India bonds, with the remaining issuances scheduled to occur at regular intervals. 

Securities with a maturity period of more than 10 years will constitute the major portion of the borrowing. Therefore, accounting for over three-fourths of aggregate lending in the second half.

Sovereign Green Bonds

Under the borrowing schedule for H2FY26, the Centre has allocated ₹10,000 crore to be raised through sovereign green bonds. The bonds are planned to finance projects in sectors such as clean energy, climate, and sustainable infrastructure. 

By including green financing in the borrowing calendar, the Centre signals its continued focus on balancing fiscal needs with long-term environmental goals.

Fiscal Targets and Revenue Position

For FY26, the Centre has planned gross borrowings of ₹14.82 lakh crore, higher than the ₹14.01 lakh crore set for the last year. The Centre will continue to remain within its 4.4% fiscal deficit target despite witnessing some revenue strain due to the GST reductions on September 4. 

The Reserve Bank of India has also provided support by handing over a higher-than-anticipated dividend of ₹2.7 lakh crore. This payment gives the government additional flexibility to manage its finances while keeping the fiscal deficit target on track.

Final Thought

This borrowing plan for H2 FY26 shows that the government is on track to meet its deficit target, while also prioritising green and sustainable financing in India’s economic strategy. 

With auctions scheduled to be over the next few months, the second half of the fiscal year will be essential in determining market liquidity.

Source: MoneyControl

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