Comfortable with govt borrowing level: Malhotra

RBI Governor Sanjay Malhotra has sought to allay market concerns over liquidity management after the government announced a record gross borrowing target of %17.2 lakh crore for the next fiscal.

- BENN KOCHUVEEDAN @ Mumbai

The FY27 borrowing target is 2.5 lakh crore higher than the previous year, triggering a spike in bond yields and overnight call money rates. The 10-year government bond yield has risen about 13 basis points to above 6.74%.

Malhotra, however, emphasised that net borrowing is only 20,000 crore higher than this year’s level. Given the 10% nominal GDP growth assumption and the sharp increase in the Union Budget size to Rs 55.5 lakh crore, he said the borrowing programme is “quite manageable”.