Centre to borrow Rs.3.6 lakh crore in first half of 2015-16

The central government will borrow Rs.3.6 lakh crore (Rs.360,000 crore) in the first half of the 2015-16 fiscal, Finance Secretary Rajeev Mehrishi told reporters here on Monday.

The amount borrowed in April-September would be 66.7 percent of the 2015-16 target of Rs.600,000 crore announced by Finance Minister Arun Jaitley in his first full budget last month.

The borrowing would go towards meeting the fiscal deficit target of 3.9 percent of the GDP for the financial year.

Reserve Bank of India (RBI) Deputy Governor R. Gandhi said on Monday the rise in government borrowings through bonds is impeding the growth of the corporate debt market in the country.

"The huge supply of government paper in the country is one of the major impediments to the growth of corporate bond market," Gandhi said at a corporate debt event in Mumbai.

Pointing out that as a percentage of the GDP, the outstanding government bonds in 2013 were at 49.1 percent while corporate bonds were at 5.4 percent, Gandhi said: "If we compare with government bond market, the corporate bond market is dwarfed."

Earlier on Monday, RBI Deputy Governor S.S. Mundra said in Mumbai that there were no differences with the government over setting up an agency for raising public debt."

Jaitley on Sunday denied any rift with RBI Governor Raghuram Rajan on this issue.

"We have been telling there are no differences. Where is the question of sorting out?," Mundra told reporters here when asked if all the differences between the government and the RBI on setting up of a Public Debt Management Agency (PDMA) have been sorted out.

The government's net borrowings through long-term bonds were pegged at Rs.453,000 crore in the current fiscal.

--Indo-Asian News service

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