In order to meet additional expenses, the government has decided to raise additional Rs. 36,000 crore through dated securities taking the total borrowing through the instrument to Rs. 96,000 crore in the remaining period of the current fiscal year.
Releasing a calendar for auction of government bonds on Tuesday, the government said it will raise the amount in two tranches of Rs. 18,000 crore each next month during March 11-15 and March 18-22.
“To enable institutional and retail investors plan their investments efficiently and provide transparency and stability to the government securities market, an indicative calendar for issuance of government dated securities for the remaining period of the fiscal year 2018-19 (February 04, 2019 to March 31, 2019) has been prepared in consultation with the Reserve Bank of India (RBI),” Ministry of Finance said in a statement.
As per the earlier calendar, the process of auctioning of bonds was to complete on March 8, including the five tranches of Rs. 12,000 crore each in the interim period. With Rs. 36,000 crore additional borrowings, the government will now raise a total of Rs. 96,000 crore in the remaining period of the fiscal year.
All these auctions will have the facility of non-competitive bidding scheme under which 5 per cent of the notified amount will be reserved for the specified retail investors.
The Ministry said the government, in consultation with the Reserve Bank of India (RBI), will continue to have the flexibility to bring about modifications in the calendar in terms of notified amount, issuance period, maturities and others.
The government may also issue different types of instruments, including instruments having non-standard maturity and floating rate bonds (FRBs), depending upon the requirement of the government, evolving market conditions and other relevant factors, after giving due notice to the market.
The government reserves the right to exercise the green-shoe option to retain additional subscription up to Rs. 1,000 crore each against any one or more of the security.
The government will also borrow Rs. 80,000 crore through auction of 8 tranches of treasury bills (T-bills) worth Rs. 10,000 crore each between February 6 and March 27.
Each tranche would include Rs. 4,000 crore of T-bills of 91 days, Rs. 3,000 crore of 182 days and Rs. 3,000 crore of 364 days.