MUMBAI: The Indian government is likely to borrow between 3.6 trillion and 3.8 trillion rupees ($70.04 billion to $73.93 billion) from the domestic market in the first half of the fiscal year that starts in April, primary dealers said.
New Delhihas set gross market borrowings at 5.7 trillion rupees in 2012-13, higher than an expected 5.3 trillion rupees, and the central bank is set to the release a calendar on Tuesday for debt issues during April to September.
"It is likely to be around 60-65 percent in the first half of 2012/13," said one primary dealer, who attended a meeting of market participants with the central bank last week.
The Reserve Bank of India (RBI), which sought feedback on the quantum, tenure and mix of securities before deciding on the borrowing calendar, seemed to agree with the market estimate, the dealer said.
The borrowings are expected to be heavy in the first half because of redemption.
"I think it will be heavily loaded in the 10-14 year segment and average maturity will be higher than last year as up to 2019 the redemption schedule is already very heavy," said another primary dealer.
Seven primary dealers said a surge in government bond yields over the past 7 sessions was a concern. The benchmark 10-year yield has risen 15 basis points as the central bank adopted a hawkish stance on inflation.
The RBI acknowledged that managing the borrowing programme would be difficult but gave no commitment to support the market, the dealers said.
The central bank is not uncomfortable with the surge in yields and is unlikely to buy more debt to contain them, three RBI officials said last week, putting the responsibility on the government to control its borrowing costs.
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