The finance ministry plans to raise 58 per cent of its annual gross borrowing target in the first half of next fiscal,which is likely to include the proposed inflation indexed bonds.
We will borrow a gross Rs 3.49 lakh crore in the first half of the new fiscal year that begins on April 1,which is 58 per cent of the full-year target, said Arvind Mayaram,secretary,department of economic affairs,after a meeting with RBI officials to finalise the Centres borrowing calendar for April to September 2013-14.
The government has proposed to raise a gross Rs 5.79 lakh crore from the market in 2013-14,and another Rs 50,000 crore has been kept for buyback of securities maturing between 2014-15 and 2016-17. The net borrowing for next fiscal is targeted at Rs 4.84 lakh crore,about Rs 17,000 crore higher than the revised estimates for 2012-13.
This is a bit lower than the usual borrowing target for the first half of the fiscal,usually above 60 per cent. This is presumably to better control the liquidity deficit which arises from excess borrowing relative to expenditure,and also presumably to accommodate the buyback of bonds, said Saugata Bhattacharya,chief economist,Axis Bank,adding that there might not be too much pressure on yields in the first half of the fiscal. In 2012-13,the government had raised Rs 5.69 lakh crore from the market of which 65 per cent was borrowed in April to September.
The calendar would enable institutional and retail investors plan their investment efficiently and at the same time provide transparency and stability to the government securities, the ministry said. The ministry is also expected to issue inflation-indexed bonds up to Rs 20,000 crore in the first six months of the fiscal,an official said,adding that its contours would be finalised soon. These bonds were proposed by finance minister P Chidambaram in the Budget to promote savings in financial instruments instead of in gold.