New Delhi: The government is targeting the second half of the fiscal year to raise funds through overseas bond sales, Finance Secretary Subhash Chandra Garg said.

The policy announcement has been made that India will be issuing sovereign bonds and the process will start soon

“We will target the second half,” Garg said in an interview on being asked if this will happen this fiscal.

The quantum, timing and number as well as market will be decided including the appointment of merchant bankers which is likely next month, he added.

“The policy announcement has been made that India will be issuing sovereign bonds and the process will start soon,” he noted. This will take place when the Centre’s second quarter borrowing programme is finalised.

The Finance Secretary said in 2013, if such bonds had been thought of then it would have been the most inappropriate time to go for it with depleting foreign reserves.

“In 2013 foreign currency reserves were depleted. That type of situation cannot be dealt with by sovereign bonds. That time was the most inappropriate time to think of a sovereign bond when there was a crisis of confidence in the rupee,” Garg said.

Faced with the crisis, the then UPA government was mulling sovereign bonds to raise capital in foreign shores in 2013 which was ultimately abandoned in favour of an NRI deposit scheme.

“Today we have very good stability. The rupee is stable, foreign reserves are going up to record levels and what we lost last year all have come back. There is a huge demand for swap window RBI has opened where millions of dollar have been received by it,” Garg said.

The government is confident there is high demand for Indian paper more so for sovereign paper, even sub-sovereign issues such as Exim Bank, PFC, IRFC got reasonable rates notwithstanding poor credit ratings. Rating agency Moody’s Investors Service upgraded India’s local and foreign currency issuer ratings to Baa2 in 2017, which is just a notch above junk.

Economists said there are few options left due to a slowing economy with slow and low tax revenue, while investors have been concerned about plans to borrow a record Rs 7.1 trillion this fiscal year for a host of welfare schemes.

Sovereign bonds in India rallied on Friday after Finance Minister Nirmala Sitharaman said during her Budget speech that the government would borrow in foreign currency to finance the budget deficit, a move that will ease pressure on local markets and will result in savings in interest cost to the government borrowings, which is Rs 6 lakh crore annually.