Cogencis, Tuesday, Feb 4

By Adrija Chatterjee and Shubham Batra

NEW DELHI – The Centre is likely to issue at least $5 bln of specified government securities as a step towards including those bonds on global indices, the finance ministry's Principal Economic Adviser Sanjeev Sanyal said.

"Minimum scale required is $400 mln for each security; it will be rupee-denominated. Therefore, minimum for that market will be $5 bln. We will easily be able to hit this target by end of next year," Sanyal told Cogencis.

The Budget for 2020-21 (Apr-Mar), presented on Saturday, proposed to fully open up certain specified categories of government securities to foreign investors as a first step towards inclusion of government securities in global bond indices. 

Earlier today, Cogencis reported that the Reserve Bank of India was "on board" the government's proposal to list select gilts on global indices.

On Monday, Economic Affairs Secretary Atanu Chakraborty had told Cogencis that talks on the proposal to list government bonds on global indices were at an advanced stage.

The government's move is aimed at attracting large passive investments into India by listing specified securities on indices, Chakraborty had said. 

Global bond indices usually insist that there should be no restriction on the entry or exit from a market. However, India imposes limits on foreign portfolio holdings on government bonds.

To overcome this, the government plans to fully open specific bonds to foreign investors. This would mean that global indices would assign weights to the bonds instead of the country.  End

Edited by Avishek Dutta