The Centre does not have any plans for extra borrowings as of now but will assess the requirement in February, economic affairs secretary Arvind Mayaram said on Thursday, amid speculations of a big fiscal slippage due to sluggish revenue growth and delay in the divestment process.
The secretary also said the Centre would evolve a consensus on setting up the National Investment Board in 2-3 weeks, after completing inter-ministerial consultations.
In September, the finance ministry and the RBI retained the government’s gross borrowing target at R5.7 lakh crore as projected in the budget for 2012-13 but the finance minister P Chidambaram last month outlined a higher fiscal deficit of 5.3% compared to the budget target of 5.1% as part of a five- year fiscal consolidation plan.
?We will assess our borrowings requirement around February. If there is a requirement, although we are hoping not to go and borrow. But in case there is marginal requirement, how much we will borrow will happen in January or February. At the moment, we are not going in for any (extra) borrowings,? Mayaram said on the sidelines of the World Economic Forum.
During April-September period, the government mopped up R3.7 lakh crore or 60% of the total borrowing target, and plans to raise another R2 lakh crore during the October- February periord. Though Chidambaram has already started to tighten the slippage by controlling expenditure, the deficit during the first half of current fiscal year touched R3.37 lakh crore or 65.6% of the budget target.
While tax receipts may pick up in the second half of the fiscal year, analysts are apprehensive over meeting the R40,000-crore target from the 2G spectrum auction and another R30,000 crore from disinvestment.
Although stake sales in companies like SAIL, BHEL, Rashtriya Ispat Nigam and National Aluminium Company has been delayed, Mayaram said the government was still hopeful of raising R30,000 crore through disinvestment.
These factors have increased the risk of a deficit much wider than Chidambaram’s revised target.
Mayaram said the ministry would stick to 5.3% fiscal deficit for 2012-13. ?Finance minister P Chidambaram’s declaration is that the fiscal deficit this year will be 5.3%. We are going work towards that, whatever it takes,? he said.
