New Delhi, July 19: The Centre's fiscal deficit this year may be within the budgeted limit of Rs 1,11,275 crore (5.1 per cent of GDP) due to the higher tax collection and better expenditure control, PNB Gilts has said.Tax collections at Rs 37,496 crore witnessed a growth of 23.8 per cent in the first quarter of 2000-01 compared to Rs 30,286 crore last fiscal. Growth in tax collection so far is higher than Centre's target of 17.83 per cent for 2000-01.
"Higher than budgeted tax realisation so far along with strict control over non-plan expenditure may help to contain the fiscal deficit within budgeted limits," PNB Gilts said in its latest debt market report.
The Gilts report said there was a favourable condition for a lower interest rate regime with declining inflation, strong growth in infrastrcuture industries and signs of higher foreign exchange reserves due to buoyancy in exports so far.
Robustness in industry was reflected in higher growth in bank credit which increased by 22.9 per cent to Rs 4,55.261 crore so far, it said adding non-food credit at Rs 73,578 crore posted a 21 per cent growth.
Liquidity remained comfortable with Money Supply (M3) increasing by 14.9 per cent to Rs 11,58,141 crore as on June 30 while foreign exchange reserves stood at $33,71 billion.
Although 63 per cent of Centre's borrowing target is yet to be completed, pnb gilts said "the prudent debt management policy of Reserve Bank of India may help in completing borrowing without any pressure on interest rates." The government has so far mopped up Rs 43,683 crore which constitutes around 37.4 per cent of the target for this fiscal, PNB Gilts said.
Of the total amount raised, Rs 34,000 crore has been through auction of dated government securities, Rs 3,000 crore through private placement, Rs 4,000 crore through sale of treasury bills and Rs 2,683.45 crore through tap sale.
RBI has also announced the auction of 12-year paper worth Rs 2,500 crore. "With this issue the gross borrowing of the government will be completed to the extent of Rs 46,183 crore which will constitute 39.5 per cent of the budgeted borrowing," it said.
PNB Gilts also said net borrowing amounted to Rs 29,080 crore which is 38 per cent of the targeted Rs 76,383 crore for the entire year.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.