Centre slashes market borrowing target by Rs 70,000 crore

The central government on Friday announced a reduction by Rs 70, 000 crore in the gross borrowing program, which would be compensated by reducing buy-back and additional flows from small savings.

Addressing a presser here, Department of Economic Affairs (DEA) Secretary Subhash Chandra Garg stated that according to the budget, the gross borrowing program for the financial year 2018-2019 was originally at Rs 6, 05, 000 crore, which included net market borrowing component (originally at Rs 3, 90, 000 crore) and additional components like small savings (originally at Rs 75, 000 crore) and a buy-back component.

Since the fiscal deficit has not been affected, the net borrowing will be left unchanged, confirmed Garg, adding that, "the gross borrowing program for the second half (of the year) is now only Rs 2, 47, 000 crore."

The first half of the year saw borrowings of Rs 2, 88, 000 crore being made. The DEA secretary said that the reduction in borrowings will be compensated by curbing buy-back and via additional inflows into small savings.

"There will be borrowings of Rs 11,000 crore per week till the beginning of November, following which the borrowing per week will be Rs 12,000 crore, like in the first half of the year. We usually do not borrow in the month of March, we will end this year's borrowing program on March 8," he added.

Garg further stated that the state of receipts and payments is stable and that they did not expect a slippage in the fiscal deficit, thus negating the need to revise it.

"Even after taking into account the likely expenditure on some items like the MSP (Minimum Support Price)-related and the Ayushman Bharat-related expenses, we believe we are on track to meet the expenditure and therefore there is no need to revise the fiscal deficit at all, so it stays at 3.3 per cent," the DEA secretary added.

He also confirmed that there were no changes made to the Treasury Bills program, which, according to the budget, was supposed to have an outstanding balance of Rs 17, 000 crore at the end of the year.

The Ways and Means Advance was decided to be kept at Rs 35,000 crore for the second half of the year, which for the month of March has been decided to be capped at Rs 25,000 crore to ensure that Ways and Means is not used to finance the borrowing program.

Another important decision taken was the introduction of Inflation Index bonds for the second half of the financial year. Garg said that there may be a few snags since this is a new instrument.