Government to borrow Rs1,23,000 crore in October-March
29 Sep 2009
The Government of India will sell bonds worth Rs1,23,000 crore ($25.6 billion) between October and March this financial year as part of its borrowing schedule, finance secretary Ashok Chawla said today.
The government had set an annual borrowing target of Rs4,51,000 crore for fiscal 2009-10 (ending 31 March 2010), and has already sold Rs2,95,000 crore worth of bonds until September.
The Rs1,23,000 borrowing target includes the conversion of market intervention bonds, Chawla said.
With the second half borrowing plans the government is expected to almost complete its fiscal 2009-10 target of Rs4,51,000 crore and analysts expect the borrowig plans to overshoot even the revised target of Rs4,51,000 crore set by the government.
A further raise in government borrowing is likely to affect market through an increase in the supply of bonds and pushing up prices.
The government had earlier estimated fiscal deficit at Rs1,33,000 crore for 2009. But this would increase by about Rs95,000 crore on account of duty cuts on edible oils, subsidy to oil marketing companies, and an additional expenditure of Rs15,700 crore due to higher salaries for government employees.
These could take the fiscal deficit well beyond 4.2 per cent of the country's gross domestic products and, with off-budget items such as oil and fertiliser bonds, the deficit might go up to 6.7 per cent to 7 per cent, say analysts.
.webp)
