A day after the Budget presentation, the Finance Ministry, on Friday, reiterated that the government’s gross borrowing for 2013-14 is pegged — as contained in the Budget document — at Rs.5.79 lakh crore while the net borrowings for the new fiscal year will be Rs.4.84 lakh crore.
At this level, the net borrowings next fiscal will be about Rs.17,000 crore higher than the revised estimates (RE) for 2012-13 as the government borrowed Rs.4.67 lakh crore from the market during the fiscal year.
If the repayment amounts during 2012-13 and 2013-14 are taken into account, the gross market borrowing proposed for the next fiscal is pegged at Rs. 5.79 lakh crore as per budget estimates (BE), which is Rs.9,393 crore higher than the BE of this fiscal at Rs.5.70 lakh crore.
The official reiteration, ostensibly, has come in the wake of concerns in the bourses that the higher market borrowing during the new fiscal would have an adverse impact.
Seeking to allay investor concerns in this regard in view of the higher borrowing may have on the targeted fiscal deficit at 4.8 per cent of the GDP (gross domestic product) in 2013-14, the Finance Ministry, in a statement, said: “The gross borrowing for 2013-14 is Rs.5.79 lakh crore only. As per earlier practice, the calendar of borrowing will be issued for this amount only.”
The statement noted that a provision of Rs.1.45 lakh crore in budget estimate 2013-14 towards repayment of market loans includes Rs.50,000 crore for buyback/switching operations during the fiscal year. This, it said, has been done for active debt management as buyback/switching operations are proposed for easing of redemption pressure for the fiscal years 2015-16 to 2017-18 as part of a medium-term consolidation process.
“Since the transaction will impact this year fiscal only to the extent of premium/discount, a provision of Rs.2,000 crore has been made in interest payments in the Budget for 2013-14 ,” it said.
Net borrowings next fiscal will be about Rs.17,000 crore higher than revised estimates