India may keep borrowing plan unchanged for FY23

India’s net direct tax collections through mid-September were up 23% year-on-year, while Goods and Services Tax catch-up from April to August was 33% higher than the previous year.

Amid an increase in revenue collection, the central government could stick to its borrowing target of 14.3 trillion rupees ($179 billion) for the year to March 2023, so that there is a chance that it will be lowered given the increase in income.

Net direct tax collections through mid-September were up 23% year-on-year, while Goods and Services Tax catch-up from April to August was 33% higher than that of the previous year.

Ritesh Bhusari, deputy managing director of treasury at South Indian Bank, told a major media house that if borrowings were lower than offered in the second half, it would be a big help and a surprise for the market.

After the budget deficit reached a record high in the year of the pandemic, the government plans to reduce it to 6.4% of gross domestic product until March 2023.

Demand for Indian debt has been stronger than many traders expected in the face of a record borrowing program, helped by speculation over their potential inclusion in global indices and record buying by banks.

If policymakers reduce the amount of borrowing planned for the second half of the fiscal year, this will also improve the outlook on the supply side.


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