Deficit at 4.4% Needs ₹15.69 Lakh Crore
New Delhi: The Indian government has planned to borrow ₹14,82,000 crore for the fiscal year 2025-26, from April 1, 2025, to March 31, 2026, to finance a fiscal deficit of ₹15,68,936 crore, equivalent to 4.4 per cent of GDP, as outlined in the Union Budget 2025-26 presented by the Ministry of Finance in February 2025.
This deficit, reduced from 4.9 per cent in FY 2024-25, will fund infrastructure projects like highways, railways, and hospitals, alongside social welfare and healthcare initiatives. The Reserve Bank of India (RBI), responsible for managing these borrowings, announced an indicative issuance calendar on September 26, 2025, for the second half of FY 2025-26 (October 2025 to March 2026), covering government dated securities (G-Secs) and treasury bills (T-bills). The first half of the year raised approximately ₹7,00,000 crore through auctions.
The total borrowing of ₹14,82,000 crore includes ₹3,95,666 crore to repay loans maturing in 2026 and ₹2,50,000 crore for switching operations, where older bonds are exchanged for new ones to manage repayment schedules, resulting in net borrowings of ₹11,53,834 crore. Total government liabilities are expected to increase from ₹1,81,74,284 crore at the end of FY 2024-25 to ₹1,96,78,773 crore by March 2026. Interest payments on internal debt are budgeted at ₹9,28,300.93 crore, with ₹8,78,383.74 crore allocated for market loans after a ₹39,500 crore adjustment for accrued interest, including ₹3,13,444 crore for interest on G-Secs and ₹5,64,939.74 crore for other internal debt obligations.
G-Secs, which are long-term bonds with maturities ranging from 5 to 40 years, include 2026 repayments of ₹1,36,359 crore for a 5.63 per cent Government Stock, ₹56,249 crore for a 7.27 per cent stock, ₹1,250 crore for a 6.18 per cent stock, and ₹1,000 crore for a 6.01 per cent stock. Special securities total ₹40,464 crore, comprising ₹36,913 crore for oil marketing companies (e.g., ₹4,971 crore for an 8.40 percent GOI Special Bond, ₹4,942 crore for a 7.59 percent bond, ₹4,500 crore each for 6.65 percent, 7.40 percent, and 9.25 percent bonds, ₹3,500 crore for a 7.68 percent bond) and ₹3,551 crore for fertilizer companies (e.g., ₹3,551 crore for a 7.95 percent bond). Floating-rate bonds reset interest semi-annually.
The H2 calendar builds on H1’s auctions, including bonds like the 7.27 per cent 2026, 7.10 per cent 2034, and 7.04 per cent 2029, in tranches of ₹10,000 crore to ₹20,000 crore. Treasury bills have zero net borrowing: ₹6,03,045.27 crore for 14-day bills (interest ₹2,600 crore), ₹6,06,191.25 crore for 91-day bills (interest ₹13,607.50 crore), ₹4,84,082.34 crore for 182-day bills (interest ₹14,227.75 crore), and ₹3,60,809.92 crore for 364-day bills (interest ₹23,634.25 crore), totalling ₹54,069.50 crore in interest. Cash management bills account for ₹50,000 crore.
Other borrowings include ₹5,00,000 crore in ways and means advances, ₹2,79,509.04 crore for redeeming National Small Savings Fund securities, ₹5,510.34 crore from the Sovereign Gold Bond Scheme, ₹145.28 crore from the Gold Monetization Scheme, ₹3,115.92 crore in compensation and other bonds (e.g., ₹2,615.92 crore for 8 percent Oil Bonds, ₹500 crore for recapitalization bonds), and ₹7,776.91 crore for international financial institutions (₹2,176 crore to IMF, ₹2,800 crore to IBRD, ₹1,800 crore to ADB, ₹1,000.91 crore to others).
The borrowing supports ₹11,11,111 crore in capital expenditure, up from FY 2024-25’s ₹14,13,000 crore borrowing. The RBI allows retail investors up to 5 per cent of auctions. The 10-year G-Sec yield is approximately 6.8 per cent as of September 2025. The budget includes green bonds and sovereign gold bonds for diversification. The RBI ensures alignment with cash balances, with weekly T-bill and periodic G-Sec auctions.
