Union Budget 2023: What are Treasury Bills?

As we await for Nirmala Sitharaman, India’s first full-time female Finance Minister to present the Union Budget of Narendra Modi-led government's on February 1, there are a lot of issues factoring in for this year's Budget amid increasingly normalcy with coronavirus cases dipping.

While all eyes will be on Budget 2023, it is imperative for people to know the key terms associated with the same. A term frequently coming up in conversations over Budget is Treasury Bills.

Treasury bills:

Money market instruments issued by RBI to finance the short term requirements of the government of India. These are discounted securities and are thus issued at a discount to face value. The return to the investor is the difference between maturity value and issue price.

Also Read | Union Budget 2023 | What are Contingency, Consolidated Funds?

There are four types of money bills:

1. 14 days money bill: The maturity period of these money bills are 14 days and are auctioned every Friday.
2. 91 days money bill: The maturity period of these money bills are 91 days and are auctioned every Friday.
3. 182 days money bill: The maturity period of these money bills are 182 days and are auctioned on every alternate Wednesday.
4. 362 days money bill: The maturity period of these money bills are 362 days and are auctioned on every alternate Wednesday. Notified amount of these auctions is Rs 500 Crores.