With this, the total market borrowing by the government in the current fiscal would come down to Rs5.58 lakh crore from Rs5.70 lakh crore as envisaged in the 2012-13 Budget
The government has called off Rs12,000 crore bond auctions, lowering its market borrowing programme for the current financial year in its bid to contain the fiscal deficit at 5.3%.
With this, the total market borrowing by the government in the current fiscal would come down to Rs5.58 lakh crore from Rs5.70 lakh crore as envisaged in the 2012-13 Budget.
“On review of the government’s cash position and funding requirement, it has been decided, in consultation with Reserve Bank of India (RBI), to reduce the government market borrowing through dated securities by Rs12,000 crore for the current financial year,” the finance ministry said in a statement.
The government has already borrowed Rs3.7 lakh crore in the first half ending 30th September, which is 65% of the total planned borrowing.
The front-loading of borrowing was done as part of its strategy to make available capital to the private sector in the last six months of 2012-13.
Finance minister P Chidambaram had in November 2012 raised the fiscal deficit projection for the current financial year to 5.3%, from 5.1% estimated in Budget.
The government has already asked the ministries to curtail their non-plan expenditure and avoid spending rush in the January-March quarter.
Its cash position has improved with flow of over Rs14,000 crore through disinvestments alone in February. Until now the government has collected around Rs 21,500 crore from PSU stake sales as against a fiscal target of Rs30,000 crore.
Chidambaram plans to bring down fiscal deficit to 4.8% of GDP in 2013-14 fiscal.
In the best case scenario the growth could climb to 5.5% this fiscal, Planning Commission deputy chairman Montek Singh Ahluwalia said, adding “if there was strength in the recovery then many more signs would have been evident”
The Indian economy would grow at a rate of between 5% and 5.5% in current fiscal and could expand by 7% in 2013-14, said Planning Commission deputy chairman Montek Singh Ahluwalia.
His comments came after the Central Statistical Organisation (CSO) has projected 5% economic growth this fiscal in its advance estimates released earlier this month.
In the best case scenario the growth could climb to “5.5%” this fiscal, he said, adding “if there was strength in the recovery then many more signs would have been evident”.
Economic growth in 2011-12 slipped to 6.2% from 9.3% a year ago mainly on account of global factors and subdued investor sentiments.
Gross Domestic Production (GDP) of the country has grown by 5.5% in April-June quarter and further declined to 5.3% in July-September quarter.
The recent industrial production data which reflects the health of mainly the manufacturing sector has also portrayed a dismal picture. Manufacturing constitutes almost 75% of the IIP.
The factory output measured in terms of Index of Industrial Production (IIP) for December, 2012, contracted by 0.6% for second straight month. IIP declined by 0.8% in November 2012.
Rangarajan said with the moderation in manufacturing or core inflation in January, there was a need to focus on the supply side easing of food articles
C Rangarajan, the prime minister’s key economic advisor, today hoped that inflation would come down to 6.5% by end-March and recommended that steps should be taken to release more food stocks to ease the price pressure.
The wholesale price index-based (WPI) inflation eased to 6.62% in January from 7.18% in December 2012, according to official data released today.
“The decline in inflation is a welcome and reassuring sign. I expect March-end inflation to be 6.5%,” said Rangarajan, the Prime Minister’s Economic Advisory Council (PMEAC) chairman, adding that January inflation has moderated more than expected.
Retail inflation, however, remained in double digits at 10.79% in January mainly on account of higher prices of vegetables, edible oil, cereals and protein-based items.
Rangarajan said with the moderation in manufacturing or core inflation in January, there was a need to focus on the supply side easing of food articles.
“Retail inflation is still high. The WPI inflation in primary and food articles is at higher levels. Efforts should be made to release larger stocks of food articles in the market,” Rangarajan said.
Rangarajan expects core inflation to be below 4% by end-March.