The government will stick to its borrowing programme but caliberate debt sales in order to maintain the 4.8 per cent fiscal deficit target, said Arvind Mayaram, Economic Affairs Secretary.
“The red line on fiscal deficit (of 4.8 per cent) is sacrosanct and will not be breached, therefore, we are trying to maximise revenues. We are hopeful that we’d be able stick to the target and after that, whatever that is required to be saved to within 4.8 per cent, that will be done,” Mayaram said.
He declined to give details about an estimate of expenditure cuts as there was another six months of the fiscal to go by. “I’d be able to tell you an estimate around March 20,” he said.
“We are mindful of what the current yields are and therefore caliberate the borrowing accordingly because markets fluctuate. It’s not that they are fixed at one point...We will continue with what our requirements are. But we will caliberate keeping in mind the market conditions on the day in which we go out,” he added.
On interest rates, he said the Reserve Bank was expected to switch back to a more modest interest rate regime once the investment cycle picks up.
“There is a sense of scepticism in the markets at the moment, possibly because of the uncertainty of the US taper creating volatility both in currency and capital markets, but the international markets are bullish on the country,” he said.
According to Mayaram, though the government has been been able to garner about `1,150 crore through divestment, the original target of `40,000 crore can be met.
Meanwhile, the government is also hopeful of better growth numbers in the coming quarters.
“We are looking forward that growth will pick up. But I cannot really predict how it would be,” Mayaram said.