Govt to raise additional borrowings of Rs 50,000 crore via government securities

To spur economic growth and meet the revenue shortfall, the central government will raise additional market borrowings of Rs 50,000 crore through dated government securities. Experts believe the move could put burden on the government's fiscal deficit target of 3.2 per cent of the GDP. The decision to raise additional borrowing could also help the economy as there's been a continuous decline in the GST collection for the past two months.

The government on Wednesday also said that in the Union Budget for FY 2017-18, gross and net market borrowing were budgeted at Rs 5,80,000 crore and Rs 4,23,226 crore, respectively with Rs 3,48,226 crore being raised (net) from dated government securities and Rs 2,002 crore from treasury bills (T-Bills). The government with the Reserve Bank of India (RBI) also reviewed the borrowing programme, under which the government will trim down the T-Bills from present collections of Rs 86,203 crore to Rs 25,006 crore by March-end, 2018. From now till March 2018, the government will not raise any net additional borrowing; T-Bills will be run down by Rs 61,203 crore and additional G-Sec borrowing will be Rs 50,000 crore.

Borrowings in the Financial Year 2017-18 till December 26 have been conducted in line with the borrowing calendar for FY18, a statement said. The gross and net market borrowings in FY 18 till December 26 are Rs 5,21,000 crore and Rs 3,81,281 crore, excluding buyback/switches, respectively. As against the budgeted net T-bills receipt of Rs 2002 crore in FY 18, net collections till December 26 are Rs 86,203 crore. Revised G-sec and T-Bill calendar for Q4 FY18 are being notified. The revised G-Sec borrowing would be Rs 15,000 crore each last five weekly auctions of FY 18 ending on February 9, 2018. The revised T-Bill borrowing will be Rs 14,000 crore each in first 13 weeks of 2018 ending on March 28.

The government on Tuesday said released the GST collection numbers for November, which have been received till December 25. The total GST collection has been Rs 80,808 crore. A sum of Rs 83,346 crore was collected as the total revenue collection under the GST for October, received during November. The revenue collected under GST during October for September was Rs 95,131 crore, while the corresponding figure for August was of Rs 93,141 crore.

A government security is a tradable instrument issued by the central government or the state governments. It acknowledges the government's debt obligation. Such securities are short term (usually called treasury bills, with original maturities of less than one year) or long term (usually called government bonds or dated securities with original maturity of one year or more).  The central government issues both, treasury bills and bonds or dated securities while the state governments issue only bonds or dated securities, which are called the State Development Loans (SDLs). Government securities carry practically no risk of default and, hence, are called risk-free gilt-edged instruments.