Centre to end 03-04 with Rs 22,000 crore cash surplus

The Centre is set to end 2003-04 with an unprecedented cash surplus of Rs 22,000-23,000 crore with the Reserve Bank of India. In 2002-03, it had a marginal surplus of just around Rs 2,000 crore.

Finance ministry officials said the surplus was invested by the Reserve Bank of India in securities which earn the Centre around 8 per cent a year.

With such huge surplus, the Centre would borrow much less in the first quarter of 2004-05 compared to what it had in the first quarter of the current fiscal.

During April-June 2003, the Centre had borrowed Rs 44,000 crore. "As of now, our surplus with the RBI is to the tune of Rs 28,000 crore," an official said.

He said the Centre would start the next fiscal on a positive note. Despite redemptions of around Rs 28,000 crore in the first quarter of the next fiscal, the borrowings would be lower, the official added.

According to the officials, the Centre did not plan to tap the market immediately. It has yet to complete its borrowing programme for 2003-04. The revised estimates put the market loans for the current fiscal at Rs 85,797 crore.

According to officials, the Centre has the flexibility to borrow another Rs 5,000 crore and will complete it. To complete the debt-swap plan, the states are likely to tap the market this month to raise Rs 10,000 crore.

While the states have swapped Rs 36,000 crore worth high-cost Central loans till now, they are expected to pre-pay another Rs 10,000 crore by the end of 2003-04. The market borrowings by the states will be for the debt-swap plan and partly to meet their expenditure needs.

Officials added that the huge receipts under the debt-swap plan had enabled the Centre to rely less on market borrowings during the current fiscal. While the Centre budgeted Rs 1,07,194 crore market loans for 2003-04, it is likely to borrow 20 per cent less or only Rs 85,797 crore.