New Delhi, March 26 (IANS) The Finance Ministry is yet to receive the Election Commission’s approval for announcing the 2019-20 first half (H1) borrowing plans.
The announcement, which was delayed on Tuesday, is likely to be made on Wednesday as the EC approval may be coming soon, sources said.
The Finance Ministry may borrow around 60 per cent of the Rs 7.10 lakh crore budgeted gross borrowings for 2019-20 in H1 from the market to meet part-redemption, expenditures for welfare schemes and keep the fiscal deficit in check, sources said.
“H1 borrowing could be 50-60 per cent of the gross borrowing. We are looking at borrowing about Rs 4.3 lakh crore in H1,” said a source.
The government normally goes for around 60 per cent of its borrowing in April-September. But the government has scheduled only 47.6 per cent of its budgeted borrowing in H1 because of volatility in the bond market.
The H1FY20 borrowings will focus on the 10-14 year segment, not the short-term bonds of 3-5 years like in H1FY19.
The government had borrowed just 47.5 per cent of its budgeted full-year target (gross) through bonds in H1FY19, much lower than the 60-65 per cent in the corresponding period over the previous five years, and had dipped more into the National Small Savings Fund (NSSF) to finance the fiscal deficit as it sought to ease pressure on the bond market that has witnessed a spurt in yield that time
This may not happen this fiscal as it is a poll year and expenditures related to welfare schemes, like the direct income for farmers, will be executed in H1. Thus, funds would be needed even though these are budgeted expenditures.
–IANS
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