New Delhi: The government on Wednesday curtailed its additional market borrowing programme by 60 per cent to Rs 20,000 crore as it expects more transfers of surplus cash from the Reserve Bank in the current fiscal ending March 31.
The decision to lower additional borrowing, which was taken after a review of revenue receipts and expenditure, will help contain fiscal deficit which has come under stress on account of lower GST mop up.
The government had last month announced that it would make an additional borrowing of Rs 50,000 crore during 2017-18 through dated securities. However, there would have been no change in the net borrowing as envisaged in the Budget.
Economic Affairs Secretary Subhash Chandra Garg said the government has reassessed additional borrowing requirements taking note of revenue receipts and expenditure pattern.
"Requirement of additional borrowing being reduced from Rs 50,000 crore as notified earlier to Rs 20,000 crore," Garg tweeted.
In a statement, the finance ministry said that additional borrowing of only Rs 20,000 crore, through the issue of government securities, would be adequate to meet the financing needs this fiscal.
"Government did not accept borrowings of Rs 15,000 crore in last three auctions.
Remaining Rs 15,000 crore would be reduced from the notified borrowing programme of ensuing weeks," the ministry added.
The government had pegged the fiscal deficit target for fiscal ending March 2018 at 3.2 per cent of the GDP. Experts said that additional borrowing by the government may have some impact on the fiscal math.
Since the revenue collection from the Goods and Services Tax (GST) in October and November has been lower than expected, the additional borrowing would help bridge the gap.
The government had in October sought transfer of Rs 13,000 crore of surplus lying with the central bank. This was after the RBI in August had paid a dividend of Rs 30,659 crore for the fiscal ended June 2017.
The dividend was less than half of Rs 65,876 crore it had paid in 2015-16.
The government had budgeted for Rs 58,000 crore dividend from the RBI in its Budget for this fiscal year.
As per the latest figure, in November 2017 fiscal deficit had breached the budget target and touched 112 per cent of the estimate for 2017-18 mainly due to lower GST collections and higher expenditure.
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