Trying to ease concerns over liquidity squeeze, the government on Friday announced a massive Rs 70,000 crore cut in its planned market borrowing programme, and said it would try and meet its needs through small savings mopup.Economic Affair Secretary Subhash Chandra Garg said the governments fiscal maths are very much in order and the government was confident of ending the financial year with the targeted fiscal deficit of 3.3 per cent of GDP.He said the government will introduce inflation index bonds from the second half of the financial year.
He said the T-bill programme will remain at Rs 17,000 crore and there will be no change in the T-bill outstanding amount.Garg said the government will borrow Rs 12,000 crore through gilts every week from November.
The government expects total mop-up through small saving schemes to exceed budget estimates, he said.The government borrowing in the second half of the financial year is estimated to be around Rs 2.47 lakh crore.
The borrowing programme of this financial year will end by March 8, 2019.Garg said the budgeted expenditure was on track despite higher MSP announcement and the launch of the Ayushman scheme.