NEW DELHI - India's government said on Monday it would stick to its borrowing plan for the current fiscal year despite an uptick in tax collection, suggesting New Delhi will continue to spend to revive Asia's third largest economy.
It said it planned gross borrowing of 5.03 trillion Indian rupees ($68.15 billion) via bonds from October-March. It has already borrowed 7.02 trillion rupees from its overall target of 12.055 trillion rupees for 2021/22.
Some market participants had expected the government to announce more borrowing to compensate states for tax shortfalls during the pandemic, but the higher tax revenues made that unnecessary, it said.
"The H2 FY 2021/22 projection also factors requirements for release of balance amount to states on account of back-to-back loan facility in-lieu of GST (indirect tax) compensation during the year," the government statement read.
Finance minister Nirmala Sitharaman and her officials have repeatedly promised in recent months to keep up spending to revive the economy.
The borrowing estimates reflect her plan to lower the annual fiscal deficit to 6.8% of GDP from 9.3% last year, without cutting planned expenditure of 34.8 trillion rupees.
Federal borrowing will be conducted in 21 weekly tranches of 230-240 billion rupees, the government said.
More than 28% of the bonds will be issued with a 10-year maturity and the government will also issue new floating rate bonds with 7-8 years maturity on top of the existing 13-year ones, it added.
Treasury bills in the December quarter are expected to raise net 200 billion rupees, the government said.
"Borrowing in first half has been completed smoothly with weighted average yield at 6.19%," the government said after a meeting of finance ministry and central bank officials.
India's central bank has been supporting the government's borrowing programme by intervening in the market and pumping liquidity into the banking system to cap borrowing costs.
(Reporting by Aftab Ahmed and Manoj Kumar; Editing by Kevin Liffey and Andrew Heavens) ((Aftab.Ahmed@thomsonreuters.com; +911149548060;))