Govt. borrowing exceeds Rs. 100,000 cr.

NEW DELHI, DEC. 4. With three months remaining, the Centre has mopped up a record Rs 100,683 crores from the market constituting 85 per cent of the targeted gross borrowing for the entire fiscal, PNB Gilts has said.

"This is the highest borrowing done in any financial year so far," PNB Gilts, a primary dealer in government securities, said in its report.

The mobilisation so far is 20 per cent higher than Rs. 83,630 crores raised during April-December 1999.

With over Rs. 1 lakh crore mop up, the Government has completed more than 85 per cent of total gross borrowing targeted at Rs. 117,704 crores while the net borrowing was Rs. 65,526 crores as against the budgeted Rs. 76,383 crores for the entire fiscal.

Of the total market borrowing so far, Rs. 69,500 crores has been raised through auction of dated securities, Rs. 18,000 crores through private placement and Rs. 10,500 crores through sale of treasury bills, the report said.

"Moreover, the market subscription to securities is also higher than last year," the report said.

Of the Rs. 90,183 crores dated security issued, market subscription has been to the tune of Rs. 78,123 crores so far compared to Rs. 74,785 crores during the same period last year, it added.

With steady borrowing, stable rupee, dip in international oil prices and worldwide decline in interest rates, PNB Gilts said, "the southward journey of interest rate is expected to continue."

Pointing to the nil ways and means advances (WMA) of the Central Government till December 22, PNB Gilts said there was not much pressure on government borrowing and the G-Sec market was bullish.

The bull run in G-Secs market, which started after the $5.5 billion India Millennium Deposit (IMD) inflow, further gained momentum with declining oil prices, indications of rate cuts in the U.S. this month and "positive interest rate environment" predicted by the RBI Governor, so far, the borrowing programme was biased towards shorter tenor securities, it said and added that "there is every likelihood that the remaining dated issues of Rs. 12,500 crores would be longer dated papers of above 11 year tenor." Continuing inflationary pressure is a major cause of concern, PNB Gilts said but lauded the government for the squeeze in expenditure that has helped contain fiscal deficit to Rs. 64,269 crores till November 2000 as against the budgeted Rs. 111,275 crores for the entire year.

- PTI

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