Mumbai: Big Cash Balance More than Rs 1 Lakh Crore will help install the government for the financial year even if the initial public offering of insurance life insurance (IPO) budgeted failed to make it before the March 31 deadline.
It can still have implications for fiscal deficits.
But the government also has a headroom to load the deficit impact by holding out some expenses.
According to the Head of Saxis Economist Bank Saugata Bhattacharya, the Big Cash Balance with the Government will be the main calibration instrument to reduce market loan pressure.
He added that the flow of tax in the fourth quarter was also expected to be strong, which would increase the position of government cash.
As a result, the center does not have to find new ways to fund the deficit even if the IPO is not taken into account.
Until now the government continues to target this fiscal IPO.
It is expected to be extensive that LIC IPO will collect more than Rs 75,000 Crore and contribute significantly to government income.
However, the omicron wave and accident stock prices listed recently have thrown a challenge.
Bhattacharya said, even though the IPO lic seems a little touch-and-away, the government has not adhered to the target of a fiscal deficit by shifting some expenditures, or limiting expenses.
Without an IPO, he expects a small selection of around 6.5% because of the 6.4% estimated AXIS Bank.
According to the Head of Economist HSBC Pranjul Bhandari, the cash balance can be used to reduce pressure on the bond market, given the expectations of large government loans in FY23.
The other steps he highlights is the urge to inclusion of bonds in the global index and develop retail debt markets.
Pressure in interest rates is also expected to emerge from policy normalization with tightening that occurs immediately after the budget in February RBI policy or during the next financial year in April 2022.
Bhandari shows that, with the increase in oil prices and global fertilizers, the risk of reversing to food inflation also exists and The time was cooked for 20bps (10 basis = 1 percentage point) reversed the repo interest rate increase at the February 9 meeting.
Head of SBI economist Soumya Kanti Ghosh has expected a 6-6.5% fiscal deficit for the next financial year (FY23).
“If it is done by LIS Pass in FY22, the government may end the fiscal with a large cash balance of the Crore RS 3 Lakh.
This can be useful in supporting most government fiscal deficits without receiving market guarantees,” Ghosh said in a recent note.
Sonal Varma of Nomura Securities expects the government to remain in the 6.8% GDP deficit target set out in the FY22 budget, with a collection of higher tax revenues.
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