The government is learnt to be considering market borrowings of around Rs 1,60,000 crore (Rs 1600 billion) through central government dated securities for 2004-05.
The Centre is also mulling over another round of buyback of high coupon government bonds from banks to bring down the weighted average of cost of public debt, sources said.
However, the proposed government borrowing programme excludes amount to be raised under market stabilisation scheme, state government loans, power bonds and government buybacks.
According to sources, market borrowing is almost 20 per cent higher than the amount borrowed for 2003-04, which stood at around Rs 1,21,500 crore (Rs 1215 billion).
As per the data relased by the weekly statistical supplement of the Reserve Bank of India, market borrowings for 2003-04 was a negative growth over total borrowings of Rs 1,22,500 crore (Rs 1,225 billion) raised for the corresponding period 2002-03.
Analysts attribute the negative growth to surplus receipts through divestment, trade receipts and lack of credit growth in the financial sector.
The proposed borrowing for the current fiscal is over and above the amount already borrowed till date through dated securities. Till date, the government has borrowed around Rs 40,000 crore (Rs 400 billion) through fixed rate and floating rate dated papers.
Last year the government had mopped up around Rs 14,434 crore (Rs 144.34 billion) under the buyback scheme. Sources added though no formal target has been set for this fiscal, the government is likely to raise around 20 per cent more than last year's receipts through buyback.
Market stabilisation scheme was launched by the government as a sterilisation instrument for the Reserve bank of India. As per the calender released by the RBI, for the first quarter of the new fiscal, estimated central government borrowings stood at Rs 33,000 crores (Rs 330 billion) and MSS accounted for Rs 35,500 crore (Rs 355 billion).
For the first half of the fiscal, while central government borrowing is at Rs 59,000 crore (Rs 590 billion), state governments are expected to raise around Rs 12,000 crore (Rs 120 billion) for a debt swap.
The RBI has announced that Rs 36,500 crore (Rs 365 billion) will raised through MSS in the second quarter of the current fiscal as the seond tranche.
During the unveiling of the auction calender and market stabilisation scheme during the end of the last fiscal, it was estimated that market borrowings for the first half of 2004-05 will be higher by around Rs 3,005 crore (Rs 30.05 billion) compared with funds raised by both centre and states last year.
Total borrowings, including the target under MSS for the first quarter alone, stood at around Rs 1,06,500 crore (Rs 1065 billion) against Rs 1,03,495 crore (Rs 1034.95 billion) in the year-ago period.