Many rating agencies and foreign brokerages such as Fitch and StanChart and Nomura, and among others have lowered the FY14 growth in the range to 4.2 to 4.8 per cent.
In the FY14 budget, the government fiscal deficit target was set at 4.8 per cent of the GDP, projected at Rs 11,371,886 crore. As GDP is likely to grow below Rs 11,371,886 crore, the fiscal deficit will lower and hence the market borrowing would also be less, the analysts said.
The Budget had also announced a Rs 50,000-crore for buyback/switching operations though which it would buy back short-term government securities and replace them with long-term securities. The government may also likely to use this swap facility in the second half.
Some market analysts feel that if government includes the Rs 50,000-crore buyback/switching operations in the borrowing calendar, the effective gross borrowing will sum up at Rs 6,29,009 crore, which could have a negative impact on the markets.
"There is uncertainty in market whether the second-half borrowing calendar will be announced keeping in mind the gross borrowing figure of Rs 6,29,009 crore or Rs 5,79,009 crore," Quantum AMC's Chari said.
Analysts also said the government can always increase their market borrowing in the last quarter, if the economy improves from the second half.
It can be noted that Q1 GDP readings came in at a poor 4.8 per cent and the Finance Minister has already hinted that even Q2 numbers will be flat but had expressed hope that it would gather steam from in the second half.