Govt to borrow Rs 2.35 lakh cr in second half of this fiscal

The government would borrow Rs 2.35 lakh crore from the market in the second half of the current fiscal, a top Finance Ministry official said on Monday.

During the first half of the fiscal year, the market borrowing through dated securities would be completed for Rs 3.44 lakh crore (Rs 3.44 trillion), Department of Economic Affairs Secretary Arvind Mayaram told reporters.

"Accordingly, the Government of India market borrowing through dated securities has been planned for... Rs 2.35 lakh crore or Rs 2.35 trillion (in the second half of the fiscal)," Mayaram said.

The Union Budget 2013-14 had pegged the gross and net market borrowings through dated securities at Rs 5.79 lakh crore (Rs 5.79 trillion) and Rs 4.84 lakh crore (Rs 4.84 trillion), respectively.

The government borrow funds from the market to finance the fiscal deficit, which is expected to be 4.8 per cent in the current financial year.

The borrowing programme will to be completed by first week of February. The average weekly borrowing would be Rs 15,000 crore (Rs 150 billion). The net borrowing is estimated at Rs 1.98 lakh crore (Rs 1.98 trillion).

Meanwhile, the Reserve Bank of India released the indicative calendar for marketable dated securities for the October-March 2013-14

to enable institutional and retail investors plan their investment efficiently.

The calendar also aims to provide transparency and stability to the Government securities market.

Mayaram further announced that the Ways and Means Advances (WMA) limit for meeting unexpected expenditure has been fixed at Rs 20,000 crore (Rs 200 billion).

Referring to the recently launched Inflation Indexed Bonds (IIB) retail sale, the Finance Ministry said those will be part of the market borrowing programme and within the total announced borrowing of Rs 2.35 lakh (2.35 trillion) crore during the October-March period.

On converting short term loans to those with longer tenure, Mayaram said "the switches of short tenure securities maturing in next 2-3 years with long tenor securities, without cash outgo will be examined in the second half of the fiscal".

In the Budget, a provision of Rs 50,000 crore (Rs 500 billion) has been made for switches/ buy-backs.

The Finance Ministry further said that the recently launched Inflation Indexed Bonds (IIBs) will be part of the market borrowing programme and within the total announced borrowing of Rs 2.35 lakh crore.

The IIBs are issued on last Tuesday of every month.

The bonds have been designed to give an investment option to investors with a view to guarding their savings against inflation and dissuading them from buying gold.