The Centre on Tuesday said it would borrow Rs.3.79 lakh crore from the market in the first half of the next fiscal, which would be over 65 per cent of the total amount that it wanted to raise from borrowings during 2012-13.
“We have budgeted the fiscal deficit at Rs.5.13 lakh crore. In the first half, gross borrowing will be Rs.3.79 lakh crore,” Department of Economic Affairs Secretary R. Gopalan told reporters here after a meeting to decide the borrowing calendar for the next fiscal.
The meeting was attended by RBI Deputy Governor H. R. Khan and senior officials of the Finance Ministry.
Gross borrowing
The gross borrowing during the first half will be 65 per cent of the total planned during the next fiscal.
Mr. Gopalan said, “We had some problem about IT refund last year. That we have taken care this year and we have also planned according to what will be the inflow and expenditure pattern. We think this will be a reasonable way of aligning with the reality of the cash requirement.”
Fiscal deficit
For 2012-13, the government has pegged the fiscal deficit at Rs.5.13 lakh crore or 5.1 per cent of the GDP.
During 2011-12, the government borrowed over Rs.5.10 lakh crore from the market. The borrowing had exceeded the budgeted borrowing target by over Rs.92,000 crore as high subsidy expenditure led to overshooting of government finances.
Small savings collection
Pinning hope of increase in small savings collection, he said borrowing could come down if it improves.
“If my small savings collection improves, it will definitely be (borrowing will come down from the Budgeted level),” he said.
“Small savings rates have been revised upwards. We hope that repo rate will start coming down because of lower inflation. Once that happens and with the rate of small savings, it is a possibility that more amount flow into the small savings and to that extent general borrowing will be less,” Mr. Gopalan said.
On the tight liquidity scenario, Mr. Gopalan said, “OMO (open market operation) is the RBI's decision. As far as liquidity stress is concerned, the RBI is monitoring it closely.
As and when they perceive stress in liquidity, they will keep on taking necessary step,” he said.
