The Hindu Business Line : Govt to borrow Rs 46,000 cr more

New Delhi, Feb. 10 The Central Government will resort to an additional borrowing of Rs 46,000 crore between February 20 and March 20 to support the economy, as higher spending and lower revenues stretch its finances.

“We had a discussion with the RBI. The borrowing will be between February 20 and March 20 to the order of Rs 46,000 crore,” Mr Ashok Chawla, Secretary in the Department of Economic Affairs, told reporters here. The additional borrowing amount was decided at the Government-RBI’s cash and debt management committee meeting here today.

The senior Finance Ministry official said that the additional borrowing would happen in four tranches. Mr Chawla’s remarks on additional borrowings sent the bond yields higher.

Meanwhile, the RBI Governor, Dr D. Subbarao, told reporters on the sidelines of a book release function here, that the additional borrowing would not be raised through the private placement route. This would imply that the Government would raise this amount from the market.

A senior RBI official said that the additional market borrowing would be conducted in a non-disruptive manner. As against a budget estimated borrowing level of Rs 1,35,000 crore, the Government’s overall borrowing this fiscal, including the proposed additional borrowing of Rs 46,000 crore, is likely to touch Rs 2,51,000 crore.

Meanwhile, the Deputy Chairman of the Planning Commission, Mr Montek Singh Ahluwalia, indicated that the Centre could easily accommodate the additional borrowing. “If you want a fiscal stimulus, you have to borrow more from the market,” Mr Ahluwalia told reporters on the sidelines of an industry event here.

Asked whether a third stimulus package was in the offing, Mr Chawla had, on Monday, made it clear that “no third stimulus package” was being contemplated.

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