New Delhi: The government may consider selling fewer bonds in the year ending 31 March after announcing expenditure cuts on Monday, finance secretary Ashok Chawla said.
“If there are substantial savings due to the reductions in spending, then borrowings may come down to that extent,” Chawla said, without giving details. The government will review the borrowing programme for the six months to March in the next two weeks, he said.
The finance ministry announced cuts in expenditure by government ministries on domestic and foreign travel, publications, advertising and purchase of vehicles. The plan will see a 10% reduction in so-called non-plan expenditure, pegged at Rs6.9 trillion for the year to March.
Savings grace: Finance secretary Ashok Chawla. Ramesh Pathania / Mint.
Chawla also said government and central bank officials will meet in 10-12 days to finalize the government’s borrowing plan for the second half of the fiscal year ending March.
A finance ministry official who declined to be named said the government may complete its borrowing plan for fiscal year 2009-10 by end-February and may reduce the size of its weekly auctions to Rs10,000 crore in the second half of the year starting 1 October.
Separately, finance minister Pranab Mukherjee said there would be no slippage in indirect tax collection on account of drought and that it is not considering any tax cuts.
Expenditure secretary Sushama Nath told reporters the finance ministry will stick to its spending target of Rs10 trillion for the current fiscal year ending March. bloomberg
(‘Reuters’ and ‘PTI’ contributed to this story.)