Government to borrow Rs 3.68 lakh crore in first half of FY15

The government said on Friday that it will borrow Rs 3.68 lakh crore in the first half of the next fiscal year (2014-15), accounting for 61.5 per cent of the total budget target for full year, which will leave more scope for the private sector to tap the market in the second half.

Gross market borrowing through issue of dated securities in 2014-15 has been pegged at Rs 5.97 lakh crore, Rs 34,000 crore higher than that of FY14.

However, net the borrowing - which excludes redemptions of government securities - will be Rs 4.57 lakh crore, which is around 3 per cent lower than the current fiscal year.

"This (market borrowing plan) is in line with fiscal correction by the government. We are confident that the borrowing programme will be conducted smoothly," Economic Affairs Secretary Arvind Mayaram told reporters in Delhi.

"We have assessed demand from banks, which is robust. This year borrowing programme was conducted smoothly. Fiscal deficit target will be met," he said.

The government will continue with in inflation index bonds, Mr Mayaram said, adding that they will be part of the borrowing programme for H1.

Net borrowing through T-bill for first quarter (April-June) may be kept Rs 40,000 crore, he added.

Last fiscal year, the government had borrowed Rs 5.63 lakh crore from the markets, of which 61 per cent was borrowed in the April-September period.

The front-loading of borrowing is aimed at making available capital to the private sector in the last six months of 2014-15.

The government hopes to garner Rs 36,925 crore from disinvestment, Rs 14,000 crore from residual stake sale in companies and healthy growth in tax collection to fund its expenditure in 2014-15.