Finmin, RBI to finalise borrowing plan soon

New Delhi: Government and Reserve Bank of India officials will meet in 10-12 days to finalise the government's borrowing plan for the second half of the fiscal year ending March 2010, Finance Secretary Ashok Chawla said on Tuesday.

Late on Monday, the finance ministry said every government department will have to cut its non-plan expenditure by 10 percent for certain heads such as domestic and foreign travel, office expenses and other administrative spending.

"In view of the current fiscal situation and that arising out of insufficient rain in large parts of the country, and the consequent pressure on government resources, there is need for further economy and rationalization of expenditure," the ministry said in a notification posted on its website.

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The government has sold 2.82 trillion rupees ($58 billion) of bonds so far in the current fiscal year from the 2.99 trillion rupees targeted in the first half ending Sept. 30. It plans to raise a record 4.51 trillion rupees in the fiscal year 2009/10.

Chawla said the borrowing may be reduced if the magnitude of savings generated by its expenditure cuts are "huge".

Expenditure Secretary Sushama Nath told reporters the finance ministry will stick to its spending target of 10 trillion rupees for the current fiscal year ending March 2010.