The Centre has decided to aggressively plug revenue holes in the onset of the Middle East crisis, rising crude prices, LPG supply fluctuations, and a plummeting rupee. To do that, the country’s apex financial body, the Reserve Bank of India, put into motion the government’s plan to raise ₹8.20 lakh crore.
How? By selling dated government securities (or G-Secs) to banks, institutions, and investors between April 1 and September 30, 2026. The auctions are set to kick off immediately, as per the latest RBI circular.
The Centre is looking at raising ₹29,000 crore through 15-year and 50-year bonds in the first week of April alone.
Apart from the G-Secs, the RBI also looks to raise a whopping ₹2.88 lakh crore through shorter-term Treasury Bills. These 91-day, 182-day, and 364-day bills are expected to rake in ₹24,000 crore every single week in the April-June quarter.
If RBI successfully pulls this off, they look to raise over ₹11 lakh crore from the market in just the first six months of the new fiscal year.
While this helps the Centre catch a breath while belaying inflation fears amid the Middle East crisis and currency depreciation, there is a negative side to it.
When the RBI borrows this aggressively, it could end up keeping interest rates stubbornly high for other borrowers. Moreover, with markets tumbling, there should be enough takers for the treasury bills and government securities to keep the RBI’s plans intact.