Centre cuts market borrowing target by Rs 70k cr in FY19

​New Delhi: The government Friday announced reduction in gross marketing borrowing estimate for 2018-19 as it expects "some more funds" from the popular small savings schemes, which will attract higher interest rate in the October-December quarter.

The finance ministry also stressed that the government would meet the fiscal deficit target of 3.3 per cent of GDP during the year ending March 2019. Giving details about the borrowing programme for the remaining six months of the fiscal, Economic Affairs Secretary S C Garg said the government would be borrowing Rs 2.47 lakh crore as compared to Rs 2.88 lakh crore during April-September of 2018-19.

The Centre will also be launching inflation-indexed bonds, the secretary said, adding one or two bond issues will come in the current fiscal. The government had budgeted a gross borrowing programme of Rs 6.05 lakh crore, which now stands reduced by Rs 70,000 crore.

"Since our fiscal deficit is not being affected at all, we have decided to continue with the net borrowing programme as it is," he said. "However, we had some rethink on the buyback programme as well as we expect some more funds to flow from small savings. So, as a result we decided to reduce the total borrowing requirement for the year by Rs 70,000 crore," Garg told reporters here.

Market borrowings are undertaken to bridge the revenue expenditure mismatch or fiscal deficit. The secretary further said the government was not looking at financing fiscal deficit from any other market means.