The finance ministry on Monday said it has chosen to stick to its borrowing target for 2013-14 and will raise Rs 2.35 lakh crore through dated securities in the second half of the fiscal. The statement is a signal that the government is intent on meeting the fiscal deficit target.
The borrowing plan, which has a net component of Rs 1.90 lakh crore, would also include inflation-indexed bonds. For retail investors, the Reserve Bank of India is likely to issue inflation-indexed savings certificates by next week.
The Centre had pegged its gross borrowing target at Rs 5.79 lakh crore with a net borrowing component of Rs 4.84 lakh crore for 2013-14.
Of this, it will raise 58 per cent or Rs 3.49 lakh crore between April and September 2013. This will be completed this week when the RBI sells bonds worth Rs 14,000 crore.
Announcing the governmentís borrowing programme for the second half of the fiscal, department of economic affairs secretary Arvind Mayaram said the government will reduce its spending if revenues fall short of target.
ďWe are going to finance oil subsidies through budgetary resources. We believe that our revenues will be in line with what we have anticipated and in case there is any shortfall there will be reduction in government expenditure of the non-essential nature,Ē Mayaram said, stressing that the fiscal deficit target of 4.8 per cent will be met.
Finance minister P Chidambaram had last week announced a fresh set of austerity measures including a 10 per cent cut in non-plan expenditure and a ban on purchases of new cars to bring down government spending.
Mayaram further said that Ways and Means Advances (WMA) limit for meeting unexpected expenditure has been fixed at Rs 20,000 crore. The finance ministry will also consider the bond buyback programme of Rs 50,000 crore in the second half of the fiscal but is yet to finalise a timeline for the plan.
For the second half, the government would on average raise Rs 15,000 crore every week through sale of bonds. These would include Rs 1,56,000 crore of treasury bills to be sold between October and December