H2 borrowing pegged at 2.35 lakh crore: Arvind Mayaram

NEW DELHI: The government on Monday said it will not borrow more than Rs 2.35 lakh crore in the second half of the current fiscal, sending a strong signal that it is determined to meet the fiscal deficit target for the full year. Speaking to journalists after finalising the borrowing calendar with officials of the Reserve Bank, Department of Economic Affairs Secretary Arvind Mayaram said any shortfall in revenues will be met by cutting non-essential expenditure, suggesting that despite forthcoming elections, the government will not slip on its fiscal commitment.


"The fiscal deficit target of 4.8% of GDP will be met...Any additional outgo on account of oil subsidies will be met through budgetary resources," Mayaram said. The yields on the benchmark 10-year bond rose 27 basis points to close at 8.85%.

Analysts have cautioned against fiscal slippage with subsidy bill rising because of the depreciation in the value of the rupee vis-a-vis the dollar and rise in global crude prices. But the borrowing calendar for the second half makes it clear that Finance Minister P Chidambaram, who has often said that the fiscal deficit target of 4.8% of the GDP will not be breached, will not allow any let up on this count.

Mayaram said the government is confident of meeting its Rs 54,000-crore disinvestment target "We believe that our revenues will be in line with what we have anticipated (and) in case there are any shortfall, there will be reduction in government expenditure of the non-essential nature," he said.

Asked about further action to deal with the fiscal deficit, Mayaram said: "In case a correction is required to be made in the future in the expenditure, it will be considered at the appropriate time." Last week, Chidambaram told the financial advisors of various ministries to stick to their budgeted expenditures estimates and not seek any additional allocations. Subsequently, his ministry rolled out austerity measures including a 10% mandatory cut in non-essential non-Plan expenditure for all ministries and departments.

Mayaram said the market borrowing through dated securities has been pegged at Rs 2.35 lakh crore. It was Rs 3.44 lakh crore in the first six months of the current fiscal.

He further said that Ways and Means Advances limit for meeting unexpected expenditure has been fixed at Rs 20,000 crore.

The government will complete it's second half borrowing in the first week of February.