For the fiscal year 2017-18, the central government borrowings stood at Rs 5.88 trillion, Rs 570 billion or nine per cent lower than the borrowings of FY17. The borrowing in FY18, however, was higher than that during the fiscal years FY12-FY16. The cost of market borrowing for the central government moderated further in FY18. The central government’s market borrowing costs has seen a sustained decline since FY14.
In FY18, the average borrowing cost for the central government was at a seven-year low of 7.08 per cent and was nine basis points lower than the average yield of auctions in FY17.
Despite the overall moderation in yields in FY18, the increase in yields in December 2017, January 2018 and February 2018 saw the Reserve Bank of India (RBI) cancelling scheduled auctions of the government securities. Cumulatively, the government cancelled auctions to the tune of Rs 300 billion in these months.