Govt plans to borrow Rs 50k cr from G-Sec Move may put burden on fiscal deficit target of 3.2 pc of GDP

The government on Wednesday said it has decided to make an additional borrowing of Rs 50,000 crore this fiscal through dated securities, a move that may put a burden on the fiscal deficit target of 3.2 per cent of GDP. However, there will be no change in the net borrowing as envisaged in the Budget for 2017-18, said a Finance Ministry statement. After the review of the borrowing programme with the Reserve Bank of India (RBI), it was decided that "the government will raise additional market borrowings of Rs 50,000 crore only in fiscal FY'18 through dated Government securities." Besides, it will trim down the T-Bills from the present collections of Rs 86,203 crore to Rs 25,006 crore by March 2018. T-Bills are securities with a shortterm duration, of less than one year, while dated securities have a maturity of over five years. "The government will thus, between now and March 2018, not be raising any net additional borrowing (T-Bills will be run down by Rs 61,203 crore and additional G-Sec borrowing will be Rs 50,000 crore)," it said. In the Budget for 2017-18, gross and net market borrowing were pegged at Rs 5.80 lakh crore and Rs 4.23 lakh crore respectively with Rs 3.48 lakh crore being raised (net) from dated Government securities and Rs 2,002 crore from T-bills, said the statement.

Noting that borrowings till December 26, 2017 have been conducted in line with the borrowing calendar fixed for the fiscal, it said that gross and net market borrowings are Rs 5,21,000 crore and Rs 3,81,281 crore, excluding buyback/switches, respectively as on December. As against the budgeted net T-bills receipt of Rs 2,002 crore, net collections till December 26 2017 stand at Rs 86,203 crore, it said. The additional borrowing, by the regime, may impact the government’s fiscal math.