NEW DELHI (Reuters) - The government stuck to its budgeted market borrowing for this fiscal year on Monday, despite a slowdown in revenues, signalling its intent to narrow the fiscal deficit.
The government will borrow 2.35 trillion rupees from the market between October and March via bonds as part of its 5.79 trillion rupees borrowing for the fiscal year through to March 2014, said Economic Affairs Secretary Arvind Mayaram.
He also reiterated the government's willingness to cut public spending in an election year if needed, to trim the deficit to 4.8 percent of gross domestic product in this fiscal year from 4.9 percent a year ago.
"We believe revenue will be in line with expectations. In case there is a shortfall, there will be a reduction in expenditure of non-essential nature," he said.
Last week, Finance Minister P. Chidambaram ordered austerity measures including a ban on holding meetings at five star hotels and creation of new posts in federal government departments to offset a slowdown in tax revenues in a slowdown-hit economy.
Finance Ministry officials reckon the austerity measures will result in a savings of 100 billion rupees this fiscal year.
The government is due to sell 140 billion rupees of bonds this week, taking its overall borrowing in the first six months of the fiscal year to 3.44 trillion rupees.
Average borrowing via bonds sales will be 150 billion rupees per week between October and February.
In addition, the government will consider replacing about 500 billion rupees of shorter tenor debt with longer dated paper in the second half, Mayaram said.
(Reporting by Manoj Kumar and Rajesh Kumar Singh; Editing by Frank Jack Daniel and Robert Birsel)