Mumbai: The government's borrowing programme is all set to overshoot the current year's (year ending 31 March 2009) target - the first time in four years – as a global crisis forces the government to borrow and spend more, finance minister P Chidambaram said.

Chidambaram, however, asserted that the country's financial system was ''stable'' and said the government was focusing on ''stimulating'' the economy even as it faces the ''ripple effects of the global financial instability''.
 
''We have now got a new problem of financial instability at the global level. We are facing the ripple effects of financial instability,'' he admitted.

``The global financial crisis is exerting pressure on all economies and perhaps it's likely that we may overshoot the budget estimates,'' he said at a conference in New Delhi. 

The parliament, meanwhile, approved supplementary demands of over Rs2,40,000 crore ($49 billion) for the year to pay for food subsidies, a rural jobs programme and to refund banks for farm debt waiver.

The additional spending will add to India's efforts to ease a credit crunch in the financial system and support economic growth.

During his budget presentation on 29 February, Chidambaram had projected a budget deficit of 2.5 per cent of gross domestic product for the year ending 31 March 2009.

``We will do our best to bring it as close to the target as possible,'' Chidambaram said today. ``Even if we don't achieve the targets by March 2009, I'm sure we can achieve it by March 2010,'' he added.

Budget deficit in the first five months of the current fiscal year (1 April 2008-31 March 2009) reached 88 per cent of the annual target, or Rs1,16,000 crore ($24 billion), compared with the full-year target of Rs1,45,000 crore.

While the government has earlier proposed to raise as much as Rs39,000 crore in bonds in the second half of the year, Chidambaram did not give details on how much more the government would borrow now.