NEW DELHI: The Centre may not need additional borrowing in the current financial year (FY23) even after taking a huge financial hit from the excise duty cut on petrol and diesel and the newly announced cooking gas subsidy for the poor.
According to sources, the Centre will stick to the borrowing calendar set for FY23. The reduction in excise duties will cause an annual loss of Rs 1 lakh crore to the government, while the subsidy on cooking gas will put an additional burden of Rs 61,000 a year.
“At the moment, it doesn’t seem we need extra capital. So, we will be sticking to the borrowing calendar fixed for FY23. If there will be a shortfall in the capex, then we will withdraw the funds from the Consolidated Funds of India,” a government source said.
The government has budgeted for Rs 16.6 lakh crore borrowing accounting for a 6.4% fiscal deficit in 2022-23. The source added that the much-awaited GST rates rationalisation exercise will get delayed owing to the inflationary pressures. The GST Council’s 47th meeting will be held in the second half of June.
However, despite inflation continuously remaining above the RBI ’s upper tolerance limit of 6%, there are no plans to revise the medium-term inflation target (4% plusminus 2). The source clarified that the rupeerouble trade mechanism is very much on the table.
“The Indian government will continue to buy cheaper oil from Russia. Talks on rupee-rouble trade are still going on with Russia. The Centre has not yet finalised the discount.” Privatisation of two public sector banks will be completed in the current fiscal as part of disinvestment plans. The Government will dilute its stake to 26% from 51% in these two banks, the source added.
Coal-centric energy policy
Coal will continue meet bulk of the power needs as it is difficult to make a transition to clean energy due to supply constraints amid geopolitical tensions, government sources said