Government set for borrowing spree in New Year
30 Dec 2011
The government is preparing to go on a borrowing spree in the New Year as its revenue targets for fiscal 2011-12 are far from being met and the potential fiscal deficit is reaching yawning proportions.
The amount of the borrowing is of course uncertain yet, but reports estimate it at anywhere between Rs40,000 crore and Rs80,000 core, depending on market conditions.
The government is saddled with a higher than estimated subsidy bill as the rupee slides and international oil prices soar. The subsidies on fuels as well as fertilisers account for a large chunk of the cash-strapped government's spending.
At the same time, the global economic turmoil of the last several months and consequent industrial slowdown in India have led to tax collections being well below estimates.
In September, the government had announced an additional market borrowing of Rs52,800 crore on top of Rs4,17,000 crore planned in the budget. This figure is likely to go up in the New Year.
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