The Budget had indicated that green bonds are part of the overall borrowing for the next financial year. During 2022-23, the government plans to borrow a record Rs 11.6 lakh crore from the market to meet its expenditure requirement to prop up the economy hit by the COVID-19 pandemic.
Reserve Bank Governor Shaktikanta Das on Monday said the decision with respect to issuance of sovereign green bonds announced in the Budget will be taken next month. Finance Minister Nirmala Sitharaman in her Budget speech announced that the government will issue sovereign bonds to mobilise resources for green infrastructure.
"The proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy," she had said. Speaking at a media briefing after customary post Budget address of the Finance Minister to RBI board members, Das said the monitoring group on cash and debt management will meet next month and it will plan for the issuance of green bonds.
"The main rationale behind going for green bond is that world over there are a lot of investors who have dedicated funds to invest in green bonds. So, basically when you float a green bond, ... (it) has a specified and dedicated purpose," he said. It will help widen the participation of international investors in the domestic bond market because there are a lot of funds internationally available which are dedicated for investing in green infrastructure projects.