With Rs.3.70 lakh crore already mopped up during the first half of 2012-13, which works out to 65 per cent of the Centre’s budgeted market borrowing programme of Rs.5.69 lakh crore, the government, on Thursday, decided to raise the balance Rs.2 lakh crore during the second half of the fiscal year.
In effect, the government is sticking to its front-loaded borrowing target as was estimated in the Budget without any increase in mop-up in the second half of the year so that adequate availability of funds is ensured and the private sector does not get crowded out.
Speaking to reporters after a meeting to firm up the government’s borrowing schedule for the second half (October-March) of 2012-13, Economic Affairs Secretary Arvind Mayaram said: “The government will borrow Rs.2 lakh crore in [the] remaining period [of] the current fiscal…We will complete second half borrowing by the end of February...we will try to keep [to the] fiscal deficit target.”
With the fiscal deficit target for 2012-13 pegged at Rs.5.13 lakh crore or 5.1 per cent of the GDP (gross domestic product) as estimated in the Budget, Dr. Mayaram noted that even as the government was committed to the path of fiscal consolidation, the gap was likely to widen.
“I don’t think we will be able to contain fiscal deficit to our Budget plan of 5.1 per cent [of the GDP]. It could be 5.2 to 5.3 per cent, which is doable,” the Economic Affairs Secretary said.