New Delhi: Due to the economic slowdown, the government’s dependence on market borrowings is increasing day by day. The debt in current financial year has grown by more than 27 percent from the estimated debt figures for the year which is making the government more cautious for the next year. To eliminate the chances of liquidity crunch in the market for borrowings, the government is doing its preparations in the calendar.

According to the sources in Finance Ministry, a meeting is planned on Tuesday for raising funds from markets in first six months of the next FY. Reserve Bank of India’s officials will be participating in the meeting. The Finance Minister Pranab Mukherjee has set a target to raise Rs 4,79,000 crore from the market in next FY.

Interest rates are still higher and in such scenario if the government is going to borrow from the market then private sector may face difficulties in getting loan from the banks. The government raises funds from the market by releasing securities through the RBI.

Due to fall in the revenue collection last year, the government’s expected borrowings from the market exceeded the estimations. In the Union Budget of 2011-12, the Finance Minister has estimated market borrowings to be Rs 3,43,000. But till the end of FY, it exceeded by Rs 93,414 crore to Rs 4,36,414 crore. There is not a great scope for increase in the economic rate figures in next FY. Hence, the government would be dependent on market borrowings for its spending.

(JPN/Bureau)