To finance the deficit, the Government’s budgeted gross and net market borrowing requirement for the year 2012-13 and 2013-14 are under:

(Rs. crore)

 

*excluding buyback/switching of securities of Rs.50,000 crore.

• The Gross Borrowing for FY 2013-14 is Rs. 5,79,000 crore only. As per earlier practice, the calendar of borrowing will be issued for this amount only.
• Provision of Rs. 1,45,008.84 crore in BE 2013-14 towards Repayment of Market Loans includes Rs. 50,000 crore for buyback/switching operations during 2013-14. This has been done in BE 2013-14 for active debt management.
• Buyback/Switching operations are proposed for easing of redemption pressure for the FY 2015-16, 16-17, 17-18. This is part of medium term consolidation process.
• Since the transaction will impact this year fiscal only to the extent of premium/ discount, a provision of Rs. 2,000 crores has been made in Interest payments in the budget for 2013-14.
• It is to further inform that the buy-back transaction will be fiscal deficit as well as cash neutral.

DSM/RS/NK

(Release ID :92840)

Buyback/Switching operations treated as fiscal-deficit and cash-neutral to support active debt management and ease redemption pressure. Repayment provisions in the 2013-14 budget include a specified allocation for buyback/switching operations as part of active debt management to ease redemption pressure in later fiscal years. The buyback/switching allocation is recorded within repayments but the transaction is treated as fiscal deficit as well as cash neutral for the year; only premium or discount impacts the current-year fiscal outturn and a provision in interest payments covers those costs.