Strong performance by small savings schemes could give the government elbow room to consider a lower market borrowing, government sources indicate.
Between April-August this fiscal, small savings collections have jumped by over 48 percent, helping the government mop-up Rs 1.6 lakh crore which is 34 percent of this year’s budget estimate. At this pace , it’s likely the government will exceed its budget estimate of Rs 4.71 lakh crore for small savings.
The Senior Citizen Savings Scheme has particularly seen heavy inflows after the doubling of the annual investment cap from Rs 15 lakh to Rs 30 lakh announced in this years budget. April-July last financial the scheme saw close to Rs 20,000 crore of collection which this year in the same period is Rs 55,000 crore, a 159 percent jump.
The recently launched Mahila Samman Savings Certificate too has clocked over Rs 9,600 crore of net collections with 15.80 lakh accounts opened up to August 20 this fiscal.
Govt sources note, "There is a small savings bonanza which is very impressive”, thus giving manoeuvrability and option to the government to reset the internals of financing its fiscal deficit . Sources add, “You can draw your inference based on the small savings data."
The government has pegged the net market borrowing at Rs 11.8 lakh crore for FY24 , after which small savings target of Rs 4.71 lakh crore is the second biggest source of financing the government’s FY24 fiscal gap of Rs 17.86 lakh crore.
Sources add tax revenues too will meet the budget aim although the government has been “conservative” in its revenue targets. And as of now it’s cash position too is “reasonable”.
Any kind of a fiscal comfort either on small savings collections or tax revenues or other avenues will help the government have a buffer for election related announcements as well.
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