Marketmen feel govt will not breach borrowing target this term

Sep 22 2013, 15:07 IST
Comments 0
Marketmen feel government will not breach borrowing target this term Marketmen feel government will not breach borrowing target this term
SummaryFinance Minister P Chaidambaram had vowed to not cross fiscal deficit target of 4.8% in current term.

The government, which is likely to announce its second half market borrowing schedule next week, will stick to its gross borrowing target of Rs 5.79 lakh crore this week, say bank treasurers and fund managers.

In the Budget, the government had said its gross borrowing for FY14 would be Rs 5,79,000 crore, including a net borrowing of Rs 4,84,000 crore and repayment of Rs 95,009 crore.

“The government is trying to keep fiscal deficit at 4.8 per cent this financial year. I don't think they are going to borrow more than the budgeted Rs 5,79,000 crore this fiscal," RK Goyal, executive director at Central Bank of India told PTI here.

Sharing similar views, Arvind Chari, fixed income fund manager at Quantum Asset Management said, "there will be no increase in the borrowing. It will be as per the schedule."

During the April-September period, the government had planned to borrow Rs 3,49,000 crore through government securities.

Last month, Finance Minister P Chidambaram had vowed not to cross this year's fiscal deficit target of 4.8 per cent of the gross domestic product.

"The target for fiscal deficit is 4.8 per cent. It is a red line and it will not be breached," Chidambaram had said.

The 4.8 per cent fiscal deficit target is based on an ambitious revenue growth of over 19 per cent during the fiscal. But year-to-date tax mop-up has not been that promising with collections inching up only in low double-digit numbers.

In the previous fiscal, Chidambaram managed to contain fiscal deficit much below the budgeted 5.8 per cent at 4.9 per cent of GDP through cuts massive cuts in planned expenditure by ministries.

During the April-July period, the government has used up as much as 63 per cent or Rs 3,40,000 crore of the Rs 5,42,000 crore of its borrowing limit as pegged in the Budget, according to the Controller General of Accounts (CGA) data released last week.

However, a few market players feel the borrowing could be lesser than the Budget target as growth is expected to lower than projected.

Prime Minister's key economic advisor C Rangarajan had last week lowered growth forecast for the current fiscal to 5.3 per cent from 6.4 per cent projected earlier.

"The PMEAC has lowered the GDP projection for this fiscal. Since the economy is expected to grow at a slower pace, there is a possibility that market borrowing could also be lesser than what is budgeted," Ashutosh Khajuria, Treasury Head at Federal

Single Page Format
Ads by Google
Reader´s Comments
| Post a Comment
Please Wait while comments are loading...