Govt to borrow Rs 52,872 cr more in the next six months

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Mr R. Gopalan, Secretary, Economic Affairs
Business Line Mr R. Gopalan, Secretary, Economic Affairs

The Government will borrow Rs 2.20 lakh crore for the second half (October 2011-March 2012) of the current fiscal. This is nearly Rs 53,000 crore more than the budgeted amount.

The Economic Affairs Secretary, Mr R. Gopalan, said that the additional borrowing was because of lower Government cash balances and the net outflow of small savings. But there will be no change in the fiscal deficit target of 4.6 per cent for the current fiscal year, he added.

The Government is also certain that the extra borrowing will not affect private investment. “The borrowing calendar has been prepared in such a manner that it will not crowd out private sector investment,” a senior Finance Ministry official said.

Revenues have been under pressure as disinvestment has dried up and there are no revenues of the “3G fees kind' this fiscal. Also, with higher interest rates on the bank deposits, money has shifted there from small savings. The net outflow is approximately Rs 11,000 crore.

The Government was expecting Rs 24,182 crore through small savings but there has been no fresh accretion till date.

As for cash balances, the Government has budgeted Rs 33,000 crore as the opening balance but this came down to Rs 16,000 crore. This is also a cause for the extra borrowing in the second half.

Analysts say that the advance tax collection for the quarter ending September 15 clearly reflected the slowdown. This could affect the corporate tax collection as well as excise tax.

Meanwhile, higher borrowing has led to decline in the bond prices. Even announcements like less borrowing through the treasury bills and completion of the auction by February could not lift prices. Lower prices helped the yield on the benchmark 10-year gilt to touch an eight-week high after traders sold due to higher than expected bond supply.

(This article was published on September 29, 2011)
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As India is borrowing Rs 4.7 lac crore or $ 95 billion this fiscal which is equal to our crude import bill and imported crude can be replaced by free or even cheaper indigenous energy I declare that India is borrowing this money to waste and to gift the same to rich oil exporters to make India poorest and them the richest.If we will subsidize cooking fuels by Rs 75000 crore a year for votes in presence of infinite free solar during sunny hours and cheaper than subsidized lpg electricity with 75% of the subsidy going to rich nobody can help us. If we will subsidize 200 liters of chlorinated pure water per urban per day as against need of 5 liters of such water that too in presence of infinite free rain water nobody can help us. If we subsidize food in presence of ample open to air spaces available with even poor to grow 100 vegetable twines per person to grow enough food for him nobody can help us. By above mindless populist grossly misdirected subsidies we are helping the rich rather than poor. When electric railway and road traction can do the work of our current motor fuel consumption of Rs 5 lac crore a year in only Rs 50000 crore overlooking of electric traction and favoring diesel/petrol road transport is wrong and is siphoning away almost all our public money in wrong direction to increase fiscal deficit. We should give more importance to electric traction , indigenous energies, free rain water, free air waves for education and information of poorest 75% and free spaces near our dwellings to grow vegetable twines irrigated by drip by water collected by rain water harvesting in covered structure to overcome all economic hardships in this poorest of poor county of the superfluous modern world.

from:  alok
Posted on: Sep 29, 2011 at 23:09 IST
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