Finmin, RBI to firm up borrowing schedule for second half soon

Finmin, RBI to firm up borrowing schedule for second half soon New Delhi: Finance Ministry and Reserve Bank officials will meet in the next 10-12 days to decide on a schedule for government borrowings for the second half of the current fiscal.

"RBI and Finance Ministry officials will meet over the next 10-12 days to finalise indicative calendar for borrowing for the second half of the fiscal (October-March 2009-10)," Finance Secretary Ashok Chawla told reporters in New Delhi.

The government in the budget had proposed to borrow Rs 4.51 lakh crore during the current fiscal, up from Rs 3.1 lakh crore during 2008-09. It had planned to borrow bulk of the amount during the first half.

The government borrowing, sources said, will not exceed Rs 10,000 crore in a week during the second half and the entire programme will be completed by February 2010.

The government yesterday announced austerity measures in view of the pressure on the exchequer due to the economic downturn and drought situation in many parts of the country.

The Finance Ministry in an order asked every ministry and department to cut non-plan expenditure like foreign and domestic travel by 10 per cent among other things.

Chawla said the borrowings may come down if savings are substantial following the austerity measures introduced by the government.

"If savings are of substantial magnitude, then it will have an impact on borrowings," he said.

As per the borrowing schedule for the first half, the government is expected to raise Rs 2.99 lakh crore from the market, which is 24 percent higher than the same period last fiscal.

The remaining amount would be borrowed in the second half of the fiscal (October-March) which is incidentally the busy season as far as credit offtake is concerned.

Meanwhile, Expenditure Secretary Sushma Nath said there are no signs of stress on the government expenses so far. And the government will stick to Rs 10 lakh crore of spending estimated in the Budget for the current fiscal.

"So far, we are comfortable with what has been budgeted. There are no signs of stress (on government finances) so far," she said.

Bureau Report