Centre plans 60% borrowing by September

2021-04-01 03:41:55

NEW DELHI: After borrowing at lowest cost since 2004-05, the Centre is hoping to raise funds at “reasonable” rates during the new fiscal year as it announced plans to complete 60% of the proposed market borrowings by September.
The government and the Reserve Bank of India, which finalised the borrowing calendar, have planned to borrow Rs 7.2 lakh crore during the first half, which is little more than 60% of the gross market borrowings of over Rs 12 lakh crore.
The government had undertaken record borrowings of Rs 13.7 lakh crore during the current financial year as it raked in funds to meet the higher spending requirements due to the Covid pandemic, which also saw a sharp drop in revenue during the first half of the year.
Economic affairs secretary Tarun Bajaj told reporters that the average weighted cost of borrowings was 5.79%, the lowest since 2004-05. He played down concerns over rising coronavirus cases, saying that the country was better prepared than last year, and it did not see a pressure on spending.
“We are going ahead with our gross borrowing in the first half of the year. We will take any decision, if required, at a later stage depending on how the year pans out. We need to see how the revenues and other streams are providing us funds this fiscal (2021-22),” Bajaj said.
He also indicated that the fiscal deficit for 2020-21 will be in line with the Budget estimate of 9.5% of GDP, despite improved tax collections.
The borrowing plan is in line with market expectations, as the Centre typically frontloads its fund-raising requirement in the first half of the year. While there have been concerns over rising yields, Bajaj said he has been holding consultations with the RBI, which takes appropriate steps to ensure that yields remain within reasonable limits.

Source link

Leave a Reply