The government will not borrow through Treasury Bills “for the sake of borrowing” during the remaining period of current fiscal, a senior Finance Ministry official said on Monday. The government has completed G-Sec borrowing for the current fiscal and it expects dividend from Reserve Bank of India in FY25, similar to FY24.

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Meanwhile, the Finance Ministry official said 80 per cent of capex and 79 per cent of Revenue Expenditure has been completed as on early February and the expectation is to achieve RE by end March.

Borrowing

“We would not borrow just for the sake of borrowings. We will borrow only as much as we require,” the official said. During January-March quarter, the government in consultation with RBI, planned to borrow ₹3.93-lakh crore through 13 weekly auctions of T Bills. So, far eight auctions have been completed, while plan is to raise ₹1.70-lakh crore though remaining five auctions with the next one scheduled on Wednesday.

T Bill is an instrument which is issued at discount while redeemed at par. Since there is no coupon rate payable on such an instrument, difference between discount price and face value is earning for the investors. Such an instrument is issued in three maturities – 91 days, 182 days and 364 days. At the same time, the government also goes for long-term borrowing with dated G-Sec. Maturity period for such a bond could be anything between 1 year and/or up to 50 years. Such bonds carry interest rate and enjoy sovereign guarantee for principal and interest.

“We have completed G-Sec borrowing for current fiscal,” the official said. The last auction took place on February 16. Borrowing through dated securities is part of government borrowing as mentioned in the budget and used to bridge the fiscal deficit. For the current fiscal, the government raised ₹15.33-lakh crore through dated securities out of which ₹8.88-lakh crore raised during April-September and remaining ₹6.55-lakh crore during October-March period.’

Dividend from RBI

Meanwhile, the government expects that its dividend income from the Reserve Bank of India for the current financial year ending March is to stay at levels similar to the last financial year. RBI board had approved a transfer of ₹87,416 crore as surplus to the government for fiscal year 2022-23, which was paid in May 2023 and gets accounted in fiscal 2024 for the government.

For fiscal 2025, the government has budgeted a ₹1.02 lakh crore surplus transfer from RBI and public sector banks, but had not provided a break-up between the two in the budget.

Expenditure

The official said that capital expenditure as a percentage of Revised Estimates (RE) has exceeded revenue expenditure. “As on early February, capital expenditure is around 80 per cent of RE, while for revenue expenditure is 79 per cent,” the official said. Under RE, the capital expenditure has been lowered to ₹9.50-lakh crore from ₹10-lakh crore of Budget Estimates. However, the Revenue Expenditure revised upwards to ₹3.54-lakh crore from ₹3.52-lakh crore.

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The official hoped that RE for both expenditures will be met. He also informed that three more instalments of tax devolution to States are to be given during current fiscal, out of which two will be given before early March and remaining at the end  of March.