'Govt's market borrowings for H2 to remain unchanged from budgeted estimates'

New Delhi: Nomura Monday said it expects the government's market borrowing for the second half of FY26 to remain unchanged from budgeted estimates.

The central government's borrowing calendar is expected to be announced early next week after discussions with the Reserve Bank.

Chief economic advisor V Anantha Nageswaran Monday said at an event that the borrowing for H2FY26 will remain unchanged.


"We maintain our view of no additional borrowing from the GoI (government of India) to meet any fiscal shortfall," said Nomura.

While it does not expect any increase or decrease from the implied budget number, Nomura expects a reduction in the share of the long end, it added. The government announced gross bond issuance of ₹14.82 lakh crore for FY26, with ₹8 lakh crore planned for the first half (April-September), leaving ₹6.82 lakh crore for the second half. In FY25, gross borrowing was ₹14.01 lakh crore.

Net direct tax collections increased by 9.2% to ₹10.8 lakh crore in H1FY26 (as of September 17) compared to ₹9.9 lakh crore in the same period last year. For FY26, the budget estimates direct tax collection at ₹25.20 lakh crore compared to the revised estimates of ₹22.37 lakh crore for last fiscal year.

According to Nomura, the T-bill line gives the government room to borrow more, as it plans flat issuance unlike previous years when it expected increases. "While not our base case, we see a risk of a borrowing cut from ₹6.8 lakh crore to around Rs 6 lakh crore, with the delta being issued in T-bills."

Nomura expects the RBI to put the delta on issuing more 5-, 7- and 15-year bonds instead of the 10-year, to boost trading in other segments.

"However, as noted, it could cut long-end issuance and issue T-bills instead of shorter-tenor bonds. This would be bond positive," it added.