Wary of a breach in fiscal deficit target, the government is expected to keep its market borrowing target at the budgeted Rs 5, 79,000 crore this fiscal. The Centre’s borrowing calendar for the second half of the fiscal is expected to be discussed on Monday.
The government has borrowed Rs 3.11 lakh crore in the first half of the fiscal year that began on April 1 against the budgeted target of Rs 3.49 lakh crore. The government can borrow up to Rs 2.8 lakh crore in the second-half of the fiscal year starting October 1 to meet the full year's borrowing target of Rs 6.29 lakh crore including Rs 95,000 crore worth of repayments.
“We will keep the borrowing within the budgeted target. We are confident of keeping fiscal deficit within 4.8 per cent of GDP,” a top Finance Ministry official told Deccan Herald.
He said the government was planning to undertake several measures to ensure fiscal discipline and meet the budgeted target. Last month, Finance Minister P Chidambaram had vowed not to cross this year’s fiscal deficit target of 4.8 per cent of GDP.
“The target for fiscal deficit is 4.8 per cent. It is a red line and it will not be breached,” Chidambaram had said.
In the previous fiscal, Chidambaram managed to contain fiscal deficit much below the budgeted 5.8 per cent at 4.9 per cent of GDP through massive cuts in planned expenditure by ministries.
Analysts said the government can always increase their market borrowing in the last quarter, if the economy improves from the second half.
It can be noted that Q1 GDP readings came in at a poor 4.8 per cent and the Finance Minister has already hinted that even Q2 numbers will be flat. But he had expressed hope that it would gather steam from the second half.