FY27 Govt Borrowing to Hit Rs 15-17 Lakh Crore Amid Redemption Surge

• India's gross market borrowing for FY27 is projected to increase to Rs 15-17 lakh crore, driven by a sharp rise in bond redemptions.
• Net borrowing is estimated between Rs 10.5-14 lakh crore, with fiscal deficit expected to be contained at 4.3-4.4 percent of GDP in FY27.
• Higher bond maturities, estimated at Rs 5.47 lakh crore in FY27 (up from Rs 3.3 lakh crore in FY26), are the primary reason for the increased gross supply.
• Despite higher gross supply, market participants anticipate continued fiscal consolidation, supported by nominal GDP growth and steady tax buoyancy.
• The government is expected to maintain a balanced maturity mix for borrowings, avoiding a heavy tilt towards ultra-long bonds, and green bonds will remain limited.

Why It Matters: FY27 government borrowing will surge to Rs 15-17 lakh crore due to redemptions, but fiscal consolidation remains key.