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Govt to Borrow Rs 500 Cr from Open Market

Published: 22nd December 2015 03:41 AM  |   Last Updated: 22nd December 2015 03:41 AM   |  A+A-

BHUBANESWAR: After raising Rs 500 crore from open market on December 8, the State will borrow an equal amount on Tuesday by selling Government securities to finance its capital expenditure.

This is the third time in the current fiscal that the Government went for market borrowing as its revenue generation failed to match the outlay made in the State Plan.

The State Government had last gone for market borrowing in 2005-06. The liquidity position of the State was much better during the last nine years due to significant growth in its own tax and non-tax revenue generation, official sources said.

With change in sharing pattern in a number of Centrally sponsored schemes, the State received reduced allocation from the Centre while the provision made in the State budget was much higher.

Besides, the drastic reduction in monthly instalment of State’s share in Central Taxes by the Centre had affected the liquidity position of the State Government, the sources said.

The funds to be raised from open market will be utilised to create capital assets. Major infrastructure projects under accelerated irrigation benefit programme (AIBP), Pradhan Mantri Gram Sadak Yojana (PMGSY), rural infrastructure development and energy sector are facing acute shortage of funds due to drastic cut in Central assistance under these schemes.

Of Rs 11,488 crore supplementary budget passed by the Assembly for the current fiscal, Rs 8,307.55 crore has been earmarked under State Plan.

Of the State Plan provision, Rs 5,000 crore has been made for infrastructure development, Rs 600 crore for installation of 33/11 KV sub-stations, Rs 2,754.33 crore for rural development sector and Rs 438.33 crore for PMGSY.

The State’s debt burden till end of October was Rs 43,560 crore which is likely to go up to Rs 56,630 crore by end of this fiscal.

While the State Government sold securities of six-year tenure on December 8, this time, stock of 10-year tenure will be off-loaded in the market.



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