The finance ministry and the Reserve Bank of India (RBI) will meet on Friday to decide the weekly breakup of about R2.48 lakh crore worth of government bonds to be issued in the second half of FY15.
The meeting, to be headed by finance secretary Arvind Mayaram and RBI deputy governor HR Khan, will come at a time when the centre finds itself with a comfortable cash position on the back of higher dividends from the RBI.
As per the FY15 Budget, the budgeted gross borrowing estimate is R6 lakh crore, while the net borrowing estimate is R4.61 lakh crore. The first-half gross borrowing calender was pegged at R3.68 lakh crore, about to be borrowed through 24 weekly auctions with maturity ranging from five to twenty years. Excluding repayments, first-half borrowing was pegged at R2.93 lakh crore.
For the week of August 11-15, the RBI cut its bond programme from R14,000 crore to R8,000 crore.
The RBI said that it would cut the R14,000 crore weekly planned bond issue for the subsequent five weeks, from August 18 to September 26, by R2,000 crore each.
The first-half gross borrowing was thus reduced to R3.52 lakh crore, about 58.6% of the full year gross borrowing estimate, lower than the trend of raising 60-65% of the total full year budgeted borrowing amount during the first-half.
?Our cash position is strong, hence the RBI was at a liberty to pare back the issue of dated securities. However, the R16,000 crore which will not be borrowed in the first half, may be added in the second half of the fiscal,? an official said. The second half gross figure is now likely to increase to R2.48 lakh crore from R2.32 lakh crore, and about 41.3% of the full year estimate. Last fiscal, the government had borrowed R5.63 lakh crore from the markets, of which 61% was borrowed during the April-September period.
The RBI transferred about R52,679 crore to the central government for its accounting year ending June 30, 2014, compared with R33,010 crore for July 2012-June 2013. The budgeted estimate for FY15 from surplus or dividends from RBI, central banks and other state-owned financial institutions is R62,414.18 crore, compared with FY14 revised estimates of R45,113.35 crore.