Moneycontrol
Last Updated : Jan 17, 2018 12:24 PM IST | Source: CNBC-TV18

Government trims additional borrowing requirement: Here's how experts react

The government trims additional borrowing requirement to Rs 20,000 crore from the earlier announced Rs 50,000 crore. In an interview to CNBC-TV18, Ashutosh Khajuria, ED of Federal Bank and Amandeep Chopra of UTI MF discussed what they make of this move as well as the impact.

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The government trims additional borrowing requirement to Rs 20,000 crore from the earlier announced Rs 50,000 crore. In an interview to CNBC-TV18, Ashutosh Khajuria, ED of Federal Bank and Amandeep Chopra of UTI MF discussed about what they make of this move as well as the impact.

"From Rs 50,000 crore the additional borrowing is moved to Rs 20,000 crore; its roughly 20 bps lower vis-à-vis gross domestic product (GDP) because we have about 165 trillion as the projected GDP, so 10 bps is roughly 16,500 crore. So if you are reducing it by about Rs 50,000 crore, you are actually talking about 20 bps lower fiscal deficit," said Khajuria.

Amandeep Chopra of UTI MF said that I do not see any dramatic shift as far as fiscal deficit numbers are concerned.

"My assumption is that given the negative sentiment and the volatility we have seen in the sovereign bond market, they have chosen to reduce the supply there and draw down on their cash reserves. Alternately, it is quite likely that they may have had a surge of growth in their small savings, which is also used for part funding fiscal deficit. So I do not think there is going to be a meaningful decline." he added.

Watch accompanying video for more details.
First Published on Jan 17, 2018 12:24 pm

tags #Economy

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