New Delhi Dec. 5: The central government will borrow an additional Rs
45,000 crore through bonds during the remaining months of this fiscal year to
meet its expenditure. "In view of the additional expenditure, following the
approval of the first supplementary demand for grants by Parliament, it has
been considered necessary by the government to raise additional resources,"
said a statement from the finance ministry on Friday. The statement further
said the Centre in consultation with the RBI has decided to issue marketable
dated securities for an amount of Rs 45,000 crore.
In December, the government is set to borrow Rs 10,000 crore from two
bond auctions of different tenor. It plans to raise Rs 6,000 crore through five
to nine years bond and Rs 4,000 crore on 20 years' bond.
As per the indicative calendar, the bonds would be raised in between
December 5-12. In January, the government will raise Rs 20,000 crore and in
February Rs 15,000 crore. The finance ministry said that all the auctions will
have the facility of non-competitive bidding scheme under which five per cent
of the notified amount will be reserved for specified retail investors.
Variable rate bonds may be issued depending upon market conditions.
This borrowing is likely to widen the fiscal deficit beyond the annual
target. The gross borrowing target for the current fiscal was earlier pegged
at about Rs 1,45,000 crore. The Lok Sabha has given its nod for additional
spend of Rs 2,37,285.84 crore, including net cash outgo of Rs 1,05,613.38
crore. When Mr P Chidambaram was the finance minister he had admitted that
India will miss the revenue and fiscal deficit targets in the current financial
year as the government wants to spend additional money to boost the aggregate
demand in the economy, which has shown signs of slowing down.
Under the Fiscal Responsibility and Budget Management (FRBM) Act, the
central government was expected to eliminate the revenue deficit and limit the
fiscal deficit to 3 per cent of the gross domestic product (GDP) by March 2009.
"We may need one more year to achieve the FRBM target of eliminating the
revenue deficit and containing the fiscal deficit to below 3 per cent of GDP,"
Mr Chidambaram had said last month.
http://www.deccanchronicle.com/Business/Business.asp
"Knock, Knock.
Who's there?
Opportunity.
Don't be silly - opportunity doesn't knock twice!"
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