Informist, Thursday, Feb 1, 2024
MUMBAI – The government will borrow 500 bln rupees through the sale of Treasury bills on a net basis in 2024-25 (Apr-Mar), unchanged from the revised estimate in the current financial year.
Of the net budgeted amount, 395.84 bln rupees will be raised through 91-day T-bills, 96.26 bln rupees through 182-day T-bills, and 7.89 bln rupees through 364-day T-bills, according to the Interim Budget for 2024-25 presented in the Lok Sabha today.
So far in 2023-24, the cost of government borrowing through Treasury bills has surged due to the prevailing liquidity deficit in the banking system. For the majority of the financial year, the Reserve Bank of India kept banking system liquidity tight, pushing the overnight rates in the money markets higher.
So far in the current financial year, the cut-offs on the 91-day T-bill ranged from 6.71% to 7.02%, the 182-day T-bill ranged from 6.83% to 7.19%, and the 364-day T-bill ranged from 6.85% to 7.22%.
In a General Election year, the incumbent government presents an Interim Budget to Parliament. Once the new government assumes office, it presents a regular full Budget. In an Interim Budget, a Vote on Account is passed for a part of the fiscal year, pending the passage of the regular Budget. A Vote on Account is a constitutional provision through which the Lok Sabha allows the government to spend money for a part of the fiscal year till a regular Budget is passed. This process typically ensures that the outgoing government does not make any big policy or tax changes that could influence voters.
Following are key details. All amounts in bln rupees:
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Reported by Nishat Anjum
Edited by Tanima Banerjee
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