New Delhi: Ruling out outward pressure on interest rates in the near future because of high market borrowings, the government on Tuesday said that it will not go for additional borrowings due to the impact of erratic monsoons as tax receipts are expected to be robust.
“Don’t see any spike in interest rates in foreseeable future,” finance secretary Ashok Chawla said when asked whether huge market borrowings of the government will jack-up interest rates.
On whether the government will go for extra borrowing to meet additional expenditure due to week monsoon, he said: “Expenditure needs will be met by way of taxes and existing budgetary provisions.”
“We don’t need to borrow extra. We will get more by way of taxes and if the need be we will try to adjust within existing budgetary provisions,” Chawla said on the sidelines of the meeting of regional rural bank chiefs with finance minister Pranab Mukherjee.
He said that the targets for the current fiscal of direct taxes have already been raised based on the performance during the first four months of 2009-10.
The finance minister has raised the target of direct tax collections to Rs4 lakh crore for the current fiscal from the earlier Rs3,70,000 crore.
In the first four months of the current fiscal direct tax collection stood at Rs73,990 crore, about 3% higher than Rs71,648 crore in the corresponding period last fiscal.
Indirect tax collections are also likely to be better in the second quarter of the fiscal, after customs duty collections topped Rs18,000 crore in the first quarter.
The government has pegged its market borrowings at a whopping over Rs4.5 lakh crore for the current fiscal to meet its burgeoning expenditure, necessitated by the need to perk up the flowing down economy.