Govt to borrow Rs 35,000-cr less this time

The government securities (G-Secs) market is poised for a huge rally. The auction calender put out by the Reserve Bank of India (RBI) for th...

The government securities (G-Secs) market is poised for a huge rally. The auction calender put out by the Reserve Bank of India (RBI) for the second half of the current fiscal on Monday reveals that the Centre will borrow almost Rs 35,000 crore less of its gross borrowing number of Rs 1,66,000 crore for 2003-04.

According to the RBI calendar, the Centre proposes to mop up Rs 25,000 crore through issuances of dated stock. Add up the Rs 13,000-crore through 364-day treasury-bills (364-day T-Bills), and the amount is Rs 38,000 crore. The total amount raised in the first half stood at Rs 93,000 crore — Rs 75,000 crore via dated stock, Rs 13,000 crore via 364-day T-Bills, and Rs 5,000 crore via private placements. The cumulative number, therefore, for the fiscal will be Rs 1,31,000 crore.

Govt to rein in fiscal deficit

New Delhi: The GOVERNMENT may fix an annual target for reducing fiscal deficit pegged at 5.6 per cent of GDP for 2003-04, in the face of mounting pressure from the Twelfth Finance Commission.

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Though the diluted version of fiscal responsibility and Budget Management Act did not provide any target, government is now contemplating a cap in the notification to be issued shortly, spelling out the detail guidelines of the Act.

‘‘We will come up with guidelines on FRBM Act,’’ Finance Minister’s advisor Vijay Kelkar said, indicating that a cap may be put on reducing the fiscal deficit of the Centre. He was responding to the Twelfth Finance Commission chairman Dr C. Rangarajan’s comment on FRBM Act.

‘‘We had a double digit fiscal deficit in the last few years. An MoU between the Centre and State does not hold. A bill is much more powerful for reducing the State’s fiscal deficit,’’ Kelkar said. PTI

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