Govt to borrow marginally less in H2 of FY26

MUMBAI: Govt on Friday said it would borrow less through long-tenure bonds during the second half (Oct-March) of the current fiscal year compared to in the first half. This could aid transmission of RBI's rate cuts.

Market analysts and investment managers said that along with cuts in GST and reduction in income tax, govt's decision to remain within the Budgeted borrowing limits shows its seriousness about adherence to fiscal prudence.

Govt also said it would borrow a marginal Rs 5,000 crore lower than its estimates, taking the aggregate borrowing for H2FY26 to Rs 6.77 lakh crore. The total borrowing for FY26 has been pegged at Rs 14.72 lakh crore, Rs 10,000 crore less than the Budget estimate. "The borrowing calendar has been spread out till March which will address market fear about additional borrowing," said Ram Kamal Samanta of Star Union Dai-ichi Life Insurance. To borrow less through long-dated papers and more through short- and medium-tenure ones was one of the suggestions to the central bank from the debt market investors.