UPSC Prelims Practice Questions — Government’s Borrowing Plan for the second half of FY 2026-27

Q1. As per the Government of India's borrowing plan for the second half of FY 2026-27, through how many weekly auctions is the gross market borrowing through dated securities to be completed?

  • A. 21
  • B. 22
  • C. 23
  • D. 26

Q2. With reference to the Government of India's borrowing plan for the second half of FY 2026-27, consider the following statements: 1. ... 2. ... 3. ... 4. ... Which of the statements given above is/are correct?

  1. Gross market borrowing through dated securities is placed at Rs 7,86,000 crore, which includes Rs 15,000 crore of Sovereign Green Bonds.
  2. The borrowing is to be spread over eight tenors, ranging from 3 years to 50 years.
  3. A greenshoe option of up to Rs 5,000 crore against each security is available to retain additional subscription.
  4. Full-year borrowing through dated securities in FY 2026-27 is now expected to exceed the Budget Estimate of Rs 17,20,000 crore.
  • A. 1 and 3
  • B. 1 and 2
  • C. 2 and 4
  • D. 1, 2 and 4

Q3. How much was raised by the Government of India through Sovereign Green Bonds in 2022-23, the first year of their issuance?

  • A. Rs 6,200 crore
  • B. Rs 15,000 crore
  • C. Rs 16,000 crore
  • D. Rs 25,000 crore

Q4. With reference to India's Sovereign Green Bonds (SGrBs), consider the following statements: 1. ... 2. ... 3. ... 4. ... Which of the above is/are NOT correct?

  1. Sovereign green bonds were announced in the Union Budget 2022-23.
  2. The framework was evaluated by CICERO, a Norway-based Second Party Opinion provider, which rated it 'Medium Green' with a 'Good' governance score.
  3. A Green Finance Working Committee was constituted to validate key decisions on the issuance of Sovereign Green Bonds.
  4. Proceeds of Sovereign Green Bonds are to be deployed exclusively in private sector renewable energy projects.
  • A. 1 and 3
  • B. 2 only
  • C. 3 and 4
  • D. 4 only

Q5. In an auction of Government of India dated securities, allocation of non-competitive bids from retail investors is restricted to a maximum of what proportion of the aggregate nominal amount of the issue?

  • A. 10 per cent
  • B. 5 per cent
  • C. 15 per cent
  • D. 20 per cent

Q6. Which one of the following correctly describes the institutional and legal basis on which the Reserve Bank of India discharges its public debt management function?

  • A. The Department of Government and Bank Accounts, under the Government Securities Act, 2006, which vests all debt management powers exclusively in the Reserve Bank
  • B. The Financial Markets Operations Department, under the Fiscal Responsibility and Budget Management Act, 2003, which makes the Reserve Bank the sole subscriber to every primary issue
  • C. The Internal Debt Management Department along with the Public Debt Offices, under the Reserve Bank of India Act, 1934
  • D. The Public Debt Management Agency, under the Government Securities Regulations, 2007, which entirely replaced the Reserve Bank's debt management role

Q7. Under the FRBM framework, the Central Government's half-yearly market borrowing programme is operationalised through which one of the following arrangements?

  • A. The Department of Expenditure in the Ministry of Finance settles the calendar, and the Securities and Exchange Board of India conducts all auctions of dated securities
  • B. The Ministry of Finance settles the borrowing calendar in consultation with the Reserve Bank of India, which conducts the auctions as debt manager
  • C. NITI Aayog determines the half-yearly borrowing limits, and the Reserve Bank is obliged to subscribe to the entire notified amount at every auction
  • D. The Comptroller and Auditor General of India approves the borrowing calendar, which is then executed solely by primary dealers without any Reserve Bank involvement

Q8. In the primary market for Government of India securities, 'devolvement' refers to which one of the following?

  • A. The retention by the Government of subscriptions received in excess of the notified amount of a security being auctioned
  • B. The exchange of an outstanding security for another of a different maturity in order to smoothen the redemption profile
  • C. The un-subscribed portion of a notified auction amount being taken on to the books of the underwriters instead of the issue being reduced
  • D. The conversion of Treasury Bills held by the Reserve Bank of India into long-dated Central Government securities

Q9. With reference to short-term financing arrangements of the Central Government, consider the following statements: 1. ... 2. ... 3. ... 4. ... Which of the above is/are NOT correct?

  1. Treasury Bills are issued in three tenors, namely 91 day, 182 day and 364 day.
  2. Cash Management Bills, introduced in 2010, have an original maturity of less than 91 days.
  3. Interest on Ways and Means Advances is charged at two percentage points above the repo rate, while an overdraft carries interest at the repo rate.
  4. Treasury Bills are zero-coupon instruments issued at a discount and redeemed at face value, with a minimum issue amount of Rs 10,000.
  • A. 1 and 3
  • B. 3 only
  • C. 2 and 4
  • D. 3 and 4

Q10. The Ways and Means Advances limit for the Central Government for the second half of FY 2026-27 was fixed by which authority, and at what level?

  • A. By the Ministry of Finance, at Rs 50,000 crore
  • B. By the Reserve Bank of India, at Rs 2,50,000 crore
  • C. By the Ministry of Finance, at Rs 1,00,000 crore
  • D. By the Reserve Bank of India, at Rs 50,000 crore

Q11. Which one of the following categories of investors holds the largest share of outstanding Central Government dated securities in India?

  • A. Foreign portfolio investors
  • B. Commercial banks
  • C. Insurance companies
  • D. Provident and pension funds

Q12. Which one of the following forms the largest component of the total outstanding liabilities of the Central Government of India?

  • A. External debt owed to multilateral and bilateral creditors, recorded at historical rates of exchange
  • B. Liabilities of the Public Account, such as small savings, provident funds and reserve funds
  • C. Internal debt, chiefly loans raised in the open market through dated securities and Treasury Bills
  • D. Special securities issued to the Reserve Bank of India against the Government's cash deficits