Govt Borrowings At Rs 28,686 Crore

The Centre raised Rs 28,686 crore under long and medium term gross borrowings, up to August 8, 1997. Repayments amounted to Rs 2,587 crore taking the net borrowings as on August 8 to Rs 26,099 crore.

As against this, the Centres net borrowings during the previous fiscal till August 9, 1996 stood at Rs 9,688 crore.

The Reserve Bank of India - the central bank is clearly taking advantage of the low interest rate scenario. It is taking efforts to complete the entire borrowings programme before the onset of the busy season when demand for funds from commercial sector is likely to push up interest rates, said a treasury head with a nationalised bank. Incidentally, with the concept of narrow banking catching on banks are preferring to lock funds in gilts as they are zero-risk weighted. This keeps the balance sheet clean as there is no threat of NPAs as interest payments are timely and guaranteed, he said.

 

Preference for gilts by banks during the current fiscal can be seen from the fact that investment in government securities amounted to Rs 28,046 crore till August 1. This is more than the liabilities raised by banks during the same period. Aggregate deposits amounted to Rs 20,565 crore till August 1.

Besides, of the outstanding treasury bills, i.e. the 14-day, 91-day and 364-day papers, in the accounts of banks as on August 8 amount to Rs 15, 910 crore. While, state governments and other institutions outstanding were lower at Rs 9,957 crore and Rs 4,043 crore. Meanwhile, as on August 14, the government has raised Rs 41, 755 crore through dated securities and 364-day treasury bills till August 14.

The centre plans to raise another Rs 5,000 crore on August 30.

With Rs 5,000 crore moving into the government coffers, the Centre would have completed nearly 88 per cent of the gross borrowing programme for fiscal 1997-98.

This effectively takes the government raising Rs 36,685.85 crore as on August 30. Besides, the Centre has raised Rs 10,001.48 crore through the 364-day treasury bill route. The budget for this fiscal has pegged the gross government borrowing programme for the fiscal 1997-98 to Rs 53,570 crore.

This includes the net borrowing programme of Rs 34,425 crore, after taking into account the redemptions of the 364-day T-bills amounting to Rs 8,241 crore and dated stock worth Rs 10,904 crore. Total redemptions for the fiscal 1997-98 by the centre amounts to Rs 19,145 crore.

Centres aggressive borrowings witnessed during the first five months of the current fiscal has helped it in not taking recourse to the ways and means account. The account continues to show nil position consistently from April 1, 1997 to August 1, 1997.

As against this, the various state governments have been seen taking recourse to the ways and means account periodically. The account showed an outstanding of Rs 389 as on July 25 which came down to Rs 36 crore on August 1.