Govt raises H1 borrowing plan to Rs 4.42 lakh crore amid tepid earnings, as repayments weigh

By: |
Updated: March 29, 2019 7:02:13 PM

Amid tepid revenue collection, the government will borrow Rs 4.42 lakh crore in the first half of FY20 which is 62.3% of the budgeted borrowing of Rs 7.1 lakh crore for the whole year ending March 2020

Northern Arc Capital, Northern Arc Capital capital, IIFL Asset, Affirma Cap, Standard Chartered, market news

Amid tepid revenue collection, the government will borrow Rs 4.42 lakh crore in the first half of FY20 which is 62.3% of the budgeted borrowing of Rs 7.1 lakh crore for the whole year ending March 2020, Subhash Chandra Garg, Finance Secretary, said in a press conference held Friday in the National Capital.According to Garg, the government will borrow Rs 17,000 crore via GILT every week for 26 weeks in the first half of the next fiscal.

The high borrowing for FY20 is due to repayment obligations, Garg said. There is a repayment liability of Rs 1.02 lakh crore for the first half and Rs 1.35 lakh crore is for the second half, and the rest is net-borrowing.

The government will borrow at 8.8% in 1-4 year bucket in Apr-Sep of FY20. It will borrow treasury bills of Rs 20,000 crore via treasury bills every week in the first quarter of FY20.  

The government will soon announce a 7-year benchmark paper. It will also announce a switch calendar on the third Monday of every month.

The GILT buyback will most likely happen in October-March. The government has also extended the maturity bracket for GILT to 15-24 years from 15-19 years.

The economic affairs secretary Subhash Chandra Garg assured that the government will stick to the fiscal deficit target of 3.4 per cent of the GDP for FY19. In the budget, the fiscal deficit target for 2019-20 was retained at 3.4 per cent of the GDP.

As per government data, the April-February fiscal deficit hit Rs 8.51 lakh crore or 134.2 per cent of the budgeted target for FY19. In the annual budget for FY20, the government had revised the fiscal deficit upwards to 3.4 per cent of GDP for the ongoing fiscal. It had previously estimated the deficit at 3.3 per cent of the budgeted target.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.