Analysts peg FY14 govt borrowing below Rs 5 lakh crore

A growing chorus of analysts expect India to keep net borrowing below Rs 5 lakh crore. Analysts have put faith in Finance Minister P Chidambaram’s fiscal discipline, with budget projections factoring in a 4.8 percent deficit, similar to the official forecast.

That may trigger a rally in bonds in 2013, with yields having potential to fall to 7.25 percent.

[caption id=“attachment_634144” align=“alignleft” width=“380”]  That may trigger a rally in bonds in 2013, with yields having potential to fall to 7.25 percent. Reuters[/caption]

Goldman Sachs estimates net borrowing at Rs 4,91,000 crore with gross at Rs 5,86,000 crore.

RBI may need to carry out Rs 1 lakh crore of OMOs in FY14 to meet government demand, anchor bond yields, bank says. It has a target for average 10-year bond yield for FY14 in 7.25-7.50 percent range.

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Credit Suisse has an estimate of Rs 4,70,000 crore rupees for net borrowing, with the possibility of an upside if the government decides on buybacks.

Standard Chartered estimates net borrowing to be on the lower side of around Rs 4,20,000-4,40,000 crore as it estimates Rs 60,000 crore of the current cash surplus going into funding the FY14 deficit.

Reuters