In an interview to CNBC-TV18, Subhash Chandra Garg, secretary of economic affairs, said the reduction of Rs 70,000 crore through borrowings would be managed by additional flows from national small savings fund.
Garg said, "Our estimation on revenues as well as on expenditure front have been done very carefully. The other day Prime Minister reviewed it, finance minister also announced on this."
According to Garg, government will not have any shortfall in aggregate on revenue front and will be able to manage for the expenditure without effecting any cut, "There is always some natural reduction in expenditure that would always take place, it would also take place this year also. The additional expenditure requirement we would be able to accommodate out of that."
He further added, "Capital expenditure so far in five months has been 44 percent of the budgeted. We see absolutely no reduction in capex."
On crude prices Garg said, "The additional cost on petrol and diesel has to be borne by someone. The cost cannot be wished away. Today it is being passed on, tomorrow if we were to pick up some part of it to socialise it on all, there will have to be some measures taken to either increase the revenues or do something on the expenditure side. However that cannot be envisaged today."
He further said, "The reduction in our gross borrowing programme of about Rs 70,000 crore does not imply any reduction to finance our fiscal deficit. Our net borrowing for financing fiscal deficit is Rs 3,90,000 crore, that stays as it is. So, that is not being reduced at all. We are not reducing fiscal financing."
"We have re-evaluated the buyback programme, which was budgeted of about Rs 72,000 crore. We do not think we need to do that much of buyback this year, it's not required. We have done our calculations again for the trajectory of redemptions coming up in next 3-4 years. There is a hump only in the year 2021-2022 and not now in the next 2-3 years," Garg said.
"We are confident that without affecting the financing of the fiscal deficit, this reduction can be done and which will be very useful, because it reduces the draft on the savings in the market. Therefore, it has positive effect on the market and the savings deployment. However it has no negative impact on financing our fiscal deficit," he added.