GOVT, RBI FINALISE BORROWING PLAN FOR FIRST HALF OF 2017-18

The Centre and the Reserve Bank of India (RBI) have decided on the government's borrowing programme for April-September 2018.

An announcement and the borrowing calendar, with details of weekly bond issuances by the RBI, will be made available on Monday evening. In a departure from the past, the meeting in North Block was held on a weekend and was not attended by any deputy governor from the RBI. According to the norm, such meetings are held on weekdays after the market close. For 2018-19, the Budget Estimate (BE) for the Centre's net borrowing is ~4.07 trillion, compared to Revised Estimates (RE) of ~4.8 trillion in 2017-18. The 2017-18 Budget Estimates were ~3.5 trillion. Gross borrowing for the year starting April 1 is pegged at ~6.05 trillion, compared to RE of nearly ~6 trillion for 2017-18. The BE for gross borrowing for the current fiscal year is ~5.8 trillion.

The Centre and the Reserve Bank of India (RBI) reportedly decided on the borrowing for the AprilSeptember period on Saturday, but an announcement on this was likely only on Monday.

The borrowing calendar with details of weekly issue of bonds by the RBI will also be available at the beginning of the next week, the Centre said.

In a departure from convention, the meeting at the North Block in New Delhi was held on a weekend.

No RBI deputy governor attended it in person.

Such meetings are usually held on weekdays, after market hours. The economic affairs secretary and a RBI deputy governor usually attend it. The borrowing numbers, the weekly borrowing schedule, switch and buybacks are announced immediately after the meeting.

On Saturday, Economic Affairs Secretary Subhash Garg, Joint Secretary (Budget) Prashant Goyal, and other officials from the Finance Ministry and the RBI attended the meeting. An RBI deputy governor reportedly joined the meeting over conference call.

Among the current RBI deputy governors N S Vishwanathan or B P Kanungo are expected to attend the borrowing meetings, which happen twice a year.

After the meeting, officials declined to comment or provide any information. They said the borrowing target for the first half of 2018-19 will be made public on Monday, after the markets close.

For 2018-19, the Centre’s net borrowing, according to Budget Estimate (BE), is ~4.07 trillion, compared to ~4.8 trillion (Revised Estimates, or RE) in 2017-18. The BE for 2017-18 was ~3.5 trillion.

Gross borrowing, according to BE, for the year starting April 1 is ~6.05 trillion, compared to 2017-18 BE of ~5.8 trillion. Gross borrowing (BE) for 2017-18 was ~6 trillion.

In the past years, the Centre has borrowed from the markets, in April-September, around 60-65 per cent of the full-year borrowing targets. For 2017-18, the Centre had said the RBI would issue long-term governments securities (G-secs) worth ~3.7 trillion. For October-March, the Centre had initially said it would borrow ~2.08 trillion. However, as the Budget data showed, the government ended up borrowing ~1.3 trillion more through G-secs for 2017-18.

Added to this was the confusion created in the bond markets when Garg had first announced that the Centre would borrow ~500 billion more than planned for the October-March period. A few weeks later, the government tweeted that the additional borrowing would only be ~200 billion.

Budget data showed the govt ended up borrowing ~1.3 trillion more through G-secs in 2017-18