- Why in news
- On 25 September 2026, the Finance Ministry announced that the Centre will borrow ₹7,86,000 crore in the second half of FY 2026-27, including ₹15,000 crore of Sovereign Green Bonds.
- What it is
- The half-yearly borrowing calendar is the Centre's plan for raising money through dated securities, set with the RBI, which manages the government's debt. Sovereign Green Bonds are government securities whose proceeds go to green public projects. Ways and Means Advances are short-term RBI loans that cover temporary mismatches between government receipts and payments.
- Greenshoe option
- The Government keeps the right to retain extra subscription of up to ₹2,000 crore against each security.
- WMA limit
- RBI has fixed the WMA limit for H2 of FY 2026-27 at ₹50,000 crore.
- Debt manager
- The RBI acts as the debt manager of the Centre and conducts the auctions of government securities.
Don’t confuse with WMA vs market borrowing: WMA is a short-term RBI advance for temporary mismatches. Market borrowing through dated securities finances the fiscal deficit.
Don’t confuse with T-Bills vs dated securities: T-Bills are short-term (up to 364 days) discount instruments. Dated securities are longer-term and pay a coupon.
Economy terms and data: 42 Prelims questions since 2013, rising in recent years; they test what a term or instrument means. In Mains, 12 news-triggered questions.
Why it matters
- A published borrowing calendar gives the bond market certainty and helps orderly price discovery.
- A wide spread of tenors, including 40 and 50 years, helps lengthen debt maturity and manage refinancing risk.
- Sovereign Green Bonds channel funds to green projects and support climate commitments.
Problems
- Heavy government borrowing can crowd out private borrowers and push up yields.
- A large stock of debt raises interest payments and limits room for capital spending.
Way forward
- Continue fiscal consolidation so that borrowing needs fall over time.
- Deepen the bond market and broaden the investor base, including retail and foreign investors.
Put in your answer
Revised FY27 dated-securities borrowing: Expected borrowing through dated securities is ₹15,99,506 crore, against Budget Estimates of ₹17,20,000 crore.
Debt smoothening tools: Switching and buyback of securities are used to smoothen the redemption profile.
- 2013Mains GS3 · Q2Reasons for FRBM Act 2003; critically assess its effectiveness.
- 2021Mains GS3 · Q2Distinguish capital and revenue budgets, explaining their components.
- 2021Prelims Q13Statements on retail G-secs, NDS-OM and CDSL correct?
- 2001Prelims Q50Which of market borrowing, T-bills, special securities are internal debt?
- 2018Prelims Q56Statements on RBI servicing G-secs and treasury bill issuers.
UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
Prelims practice · Statements
Ours, not from a UPSC paper
Consider the following statements:
- 1.Ways and Means Advances are short-term loans from the RBI that cover temporary mismatches between government receipts and payments.
- 2.Treasury Bills are short-term government securities that are issued at a discount to face value and redeemed at par.
- 3.Under the greenshoe option in the Centre's borrowing calendar, the Government can retain extra subscription of up to ₹2,000 crore against each security auctioned.
Which of the statements given above is/are correct?
True or false?
1 of 5
Statements the way Prelims prints them. Say first, then see the fact.
1.The H2 borrowing will be completed through 23 weekly auctions.
True. 23 weekly auctions.
2.The greenshoe option lets the Government retain extra subscription of up to ₹2,000 crore against each security auctioned.
True. Up to ₹2,000 crore per security.
3.Ways and Means Advances are meant to meet temporary mismatches in government accounts, and RBI has fixed the H2 limit at ₹50,000 crore.
True. WMA covers temporary mismatches; H2 limit is ₹50,000 crore.
4.Treasury Bills are issued by the Government of India with maturities of 91, 182 and 364 days and are issued at a discount to face value.
True. T-Bills are zero-coupon short-term instruments issued at a discount and redeemed at par.
5.Switching and buyback of securities are used by the Government mainly to raise additional fresh revenue.
False. They are used to smoothen the redemption profile, not to raise revenue.
Written by us from the release, not by UPSC; checked by a second model.
Mains practice
10 marks · 150 words
The Centre has announced gross market borrowing of ₹7,86,000 crore for the second half of FY 2026-27, which includes ₹15,000 crore of Sovereign Green Bonds. Discuss how the government's market borrowing is managed through the RBI, and examine its implications for the economy and for public debt management.
Worth revising until Prelims 2028: most news questions come within two years of the event.