The Government has said that it will borrow over 60 per cent of the total budgeted market borrowings for the next fiscal in the first half, which would amount to Rs 2.5 lakh crore.
The Department of Economic Affairs (DEA) Secretary, Mr R. Gopalan, told reporters today after a meeting that the gross borrowings of the government would be Rs 2.5 lakh crore in the first half (April-September) of the 2011-12 fiscal.
Prospects of tax buoyancy on the back of robust economic growth have lowered the government’s dependence on market borrowings, pegged at Rs 4.17 lakh crore for 2011-12 against Rs 4.47 lakh crore as per the revised estimates of the current fiscal.
“Our own requirement in absolute terms is the same, which means in percentage terms it is less. So there is free space for the private sector to access the market,” Mr Gopalan said.
Lower government borrowings for the entire fiscal will have a positive impact for the private sector, as they would not crowd out the resources as much as they did in the current fiscal (2010-11).
“Our experience is that private sector gets into the market in the second half and state governments also access the market. So governments usually access the market in the first half,” the DEA Secretary said.
The net market borrowing of the central government through the issue of dated securities in 2011-12 is estimated to be Rs 3.43 lakh crore.