G secs yield higher weighted average maturity rates: RBI

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Mumbai, Apr 28 (UNI) Gross and net market borrowings (including 364-day Treasury Bills) during 2007-08 amounted to Rs 1,88,205 crore and Rs 1,09,504 crore, respectively, accounting for 99.7 per cent and 99.9 per cent of the estimated borrowings for the year, RBI today said.

In its macroeconomic pointers for the year, released ahead of the annual credit policy to be announced tomorrow, the Apex Bank said the weighted average maturity of dated securities issued during 2007-08 at 14.90 years was higher than that of 14.72 years, during the previous year. The weighted average yield of dated securities issued during 2007-08 was 8.12 per cent as compared with 7.89 per cent during 2006-07.

The State Governments budgeted a revenue surplus of 0.3 per cent of GDP in 2007-08, as against revenue deficit (RD) of 0.1 per cent in 2006-07 (RE). The gross fiscal deficit (GFD) was budgeted at 2.3 per cent of GDP in 2007-08, lower by 0.4 percentage points over the previous year.

During 2007-08, the States (including the Union Territory of Puducherry) raised market loans amounting to Rs 67,779 crore (84.1 per cent of gross allocation) through auctions, as compared to Rs 20,825 crore (78.3 per cent of gross allocation), during the previous year. The cut-off yield was placed at 7.84-8.90 per cent.

The weighted average yield on market loans firmed up to 8.25 per cent during 2007-08 from 8.10 per cent in the previous year.

The average daily utilisation of Ways and Means Advance and overdraft by the States during 2007-08 was Rs 648 crore, as against Rs 248 crore during 2006-07. The cash surplus position of the States, as reflected in their investments in Treasury Bills (14-day and auction Treasury Bills), remained sizeable. The average investment by the States in Treasury Bills during 2007-08 amounted to Rs 73,680 crore, as against Rs 63,718 crore during the previous year.

Referring to the fiscal correction and consolidation under the Fiscal Responsibility and Budget Management (FRBM) Act that was continued for the Central Government, the Central Bank said the revised estimates (RE) for the year placed the revenue deficit and gross fiscal deficit at 1.4 per cent and 3.1 per cent of GDP, respectively, which were lower than the budget estimates, both in absolute terms and relative to GDP.

The reduction in GFD and revenue deficit by 0.4 per cent and 0.5 per cent of GDP, respectively, during 2007-08 (RE), over 2006-07 met the stipulated minimum threshold levels of 0.3 per cent and 0.5 per cent of GDP for GFD and revenue deficit, respectively, under the FRBM Rules, 2004. Gross primary surplus of the Centre was placed higher at 0.6 per cent of GDP during 2007-08 (RE) than 0.2 per cent in the budget estimates for the same year.

The Union Budget for 2008-09 proposed to continue the fiscal consolidation process, with the key deficit indicators, namely, revenue deficit and GFD, budgeted to be lower by 0.4-0.6 percentage points and primary surplus higher by 0.5 percentage points of GDP in 2008-09 than in the previous year. While the FRBM targets relating to GFD are set to be achieved in accordance with the mandate, the Budget proposed to reschedule the stipulated target of zero revenue deficit by 2008-09 under FRBM Rules, 2004, primarily on account of a shift in plan priorities in favour of revenue expenditure-intensive programmes and schemes.

UNI VK SR AG1903

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