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Govt to borrow more

New Delhi, Sept. 29: The government today said it had increased its market borrowing for the fiscal by Rs 52,800 crore to Rs 4.7 lakh crore because of a drop in small savings plans and cash reserves. However, the fiscal deficit target is kept intact at 4.6 per cent of the gross domestic product.

“We are increasing the gross borrowings for the second half (of the fiscal) by Rs 52,800 crore. The reason is small savings collection has gone down,” economic affairs secretary R. Gopalan told reporters here.

With this, the gross market borrowing for fiscal 2011-12 will rise to Rs 4.7 lakh crore, up from the budgeted Rs 4.17 lakh crore. In the previous fiscal, the gross borrowing was Rs 4.37 lakh crore.

In the October-March period, the scheduled borrowing will be Rs 2.2 lakh crore. In the first half of this fiscal (April-September), the government borrowed Rs 2.5 lakh crore through dated securities.

“There is switch taking place from National Small Saving Funds to dated securities. Also, we need to shore up the cash balance,” Gopalan said.

Officials said small savings had gone down because the interest rates offered by banks were higher than those offered by instruments such as the post office schemes.

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