Govt to retain borrowing plan of Rs 4.47 lakh cr this fiscal

NEW DELHI: The government will retain its borrowing plan of Rs 4.47 lakh crore this fiscal, despite reducing the size of market mop-up by Rs 10,000 crore earlier this month due to cash shortage in the system.

This would be done by having another borrowing after February 11 when the scheduled calendar for mop-up ends, an official source said.

He added that it could also be done by adjusting the amount within the planned borrowing.

The scheduled market borrowing could also be increased till February 11, the source said.

The government had reduced its market borrowings by Rs 5,000 crore each on auctions done on December 10 and December 25, after reviewing its cash position and liquidity situation in the market.

It may also be noted that the Reserve Bank had blamed the Government's surplus cash balances for aggravating the liquidity situation.

"This (liquidity crunch) has been mainly due to persistence of large government cash balances which have averaged Rs 84,000 crore since November," the RBI had said in its mid-quarterly review of December 16.

The government has collected robust revenues, both from tax and non-tax sources, but has not been spending fast enought, creating cash crunch in the system.

The indirect tax collection rose by 42.3 per cent to Rs 2.07 lakh crore during April-November this year, which is 66.3 per cent of the overall target of Rs 3.13 lakh crore fixed for 2010-11.

The direct tax collections surged by 17.85 per cent to Rs 2.16 lakh crore during April-November this year

The Government also got over Rs 65,000 crore more than budget estimates through auction of spectrum for high speed mobile and broadband services. It also got the Parliament nod to spend close to this much amount over Budget estimates in two supplementary demands for grants.

Originally, the government had planned in the Budget to raise Rs 4.57 lakh crore from markets this fiscal.

But after more than expected revenues from spectrum sale, it cut its borrowing size to Rs 4.47 lakh.