NEW DELHI (Reuters) - India will stick to its borrowing plan of 12 trillion rupees for the current fiscal year, economic affairs secretary Tarun Bajaj said on Wednesday, even as the government expects to fall short of its revenue targets.
India will borrow 4.34 trillion rupees via bonds in the second half of the year ending in March 2021, in 16 weekly tranches of 270-280 billion rupees concluding in the last week of January. It borrowed the rest in the April-September period.
The government is not extending its borrowing programme beyond January as it wants states and private firms to use the period to raise funds from the market, Bajaj said.
He also said that government does not expect to garner 2.1 trillion rupees ($28.52 billion) from the sale of stakes in state-owned companies.
Earlier on Wednesday, the government extended the deadline for submitting initial bids by private firms to buy state-owned Bharat Petroleum Corp Ltd for the fourth time, crushing hopes of garnering the $8-$10 billion in proceeds during the current year.
Asia’s third-largest economy contracted by a record 23.9% in April-June under the world’s most stringent lockdown to curb the spread of the coronavirus that has lead to a fall in both tax and non-tax revenues.
The government had already topped its fiscal deficit target in the first five months of the year with net federal tax receipts falling by about 30% to 2.84 trillion rupees.
The government does not expect to meet its 3.5% fiscal deficit target for the year. Bajaj said the government will lay out its new targets in February.
Market participants however fear the government could likely announce the additional borrowing only in the last quarter when they have better clarity on full-year revenues.
“Given the highly uncertain outlook on the fiscal math... any larger-than-expected revenue shortfalls to be plugged thereafter by additional issuance,” said Radhika Rao, economist at DBS Bank.
Reporting by Aftab Ahmed and Swati Bhat; Editing by Andrew Heavens and Nick Macfie
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