HomeEconomy NewsUnion finance ministry to announce borrowing calendar for H2 of FY21 today

Union finance ministry to announce borrowing calendar for H2 of FY21 today

The union finance ministry in consultation with the Reserve Bank of India (RBI) will decide the borrowing calendar for the second half of the current fiscal today.

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By Latha Venkatesh  September 30, 2020, 3:26:17 PM IST (Published)

Union finance ministry to announce borrowing calendar for H2 of FY21 today
The union finance ministry in consultation with the Reserve Bank of India (RBI) will decide the borrowing calendar for the second half of the current fiscal today. Bond dealers say the market will be able to take an amount of Rs 5 lakh crore in its stride.


As per the announcement made in May, the government intends to borrow the remaining Rs 5.02 lakh crore out of Rs 12 lakh crore during the October-March period to meet rising expenditure to combat the COVID-19 crisis amidst moderation in tax collections.

The government had envisaged raising 58 percent of the total borrowing target of Rs 6.98 lakh crore from the dated securities in the first half of the current fiscal.

During the first quarter of 2020-21, the central government issued dated securities worth Rs 3,46,000 crore as against Rs 2,21,000 crore in the same period a year ago. In the second quarter, the borrowing through dated papers has touched Rs 3.60 lakh crore as of September 18.

Thus, total borrowing so far this fiscal has been Rs 7.06 lakh crore, exceeding the government borrowing plan of Rs 6.98 lakh crore. This leaves the room for the borrowing of less than Rs 4.94 lakh crore in the second half of the financial year.

One more borrowing as per the calendar is likely to take place on September 25 of Rs 30,000 crore. After that, the borrowing for the remaining six months of the current fiscal will be limited to Rs 4.64 lakh crore if the government does not raise its borrowing level beyond Rs 12 lakh crore.

Hard-pressed for funds to combat rising coronavirus infections, the government in May increased its market borrowing programme for the current financial year by more than 50 percent to Rs 12 lakh crore.

Union finance minister Nirmala Sitharaman in the 2020-21 Budget, presented in Parliament in February, had pegged the gross market borrowing -- which is also a reflection of the fiscal deficit --, for the current fiscal at Rs 7.80 lakh crore. The amount was up from Rs 7.1 lakh crore in 2019-20.

However, in view of the impact of the lockdown on tax collection and the need to garner additional resources to fight the pandemic, the government decided to substantially increase the market borrowing programme for the current fiscal by about 54 percent or Rs 4.2 lakh crore.

The government raises money from the market to fund its fiscal deficit through dated securities and treasury bills. The budget has pegged fiscal deficit at 3.5 percent for the next fiscal, down from 3.8 percent of the GDP in the current financial year.

Last fiscal, the government had to resort to the 'escape clause' in the Fiscal Responsibility and Budget Management (FRBM) Act for deviating from the fiscal deficit target to 3.8 percent from the Budget estimate of 3.3 percent for 2019-20.

The 'escape clause' allows the government to breach its fiscal deficit target by 0.5 percentage points in times of severe stress in the economy, including periods of structural change and those when growth falls sharply.

(With inputs from PTI)
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