Date:31/08/2005 URL: http://www.thehindubusinessline.com/2005/08/31/stories/2005083102310600.htm

Back Govt market borrowings likely to be much higher

Our Bureau

Mumbai , Aug. 30

THE market borrowing programme of the Central Government during 2005-06 is likely to be much higher than in the previous year, the RBI said in its annual report on Monday.

For the current fiscal, the Union Budget has placed net market borrowings (excluding MSS) of the Central Government at Rs 1,10,295 crore (inclusive of net issuances of 182-day Treasury Bills). The gross market borrowings are estimated at Rs 1,78,467 crore; this included repayments of Rs 68,272 crore. The reintroduction of capital indexed bonds would help to widen investor base and provide holders with an inflation risk free return on their investment. They would also lower the cost of borrowings to the Government in the long run.

However, in 2004-05, the Central Government did not avail itself of overdraft for the first time since operationalisation of the ways and means advances (WMA) scheme in April 1997.