There have been reports that the Rashtriya Swayamsevak Sangh and the Swadeshi Jagran Manch have expressed reservations on the decision to the government and that the prime minister’s office had asked for a review. “I am hearing it from you,” the FM said, when asked about these reports.
Asked about the details of any such sovereign offer, such as the timing of the issue and the size, she said it has not been worked out. “I don’t think we have worked it out as yet,” said Sitharaman, who presented the first budget of the new government on July 5.
“The government would start raising a part of its gross borrowing programme in external markets in external currencies. This will also have a beneficial impact on the demand situation for government securities in domestic market,” Sitharaman had said in her budget speech, adding that India’s sovereign external debt to GDP was among the lowest globally, at less than 5%.
In an interview to ET after the budget, the then finance secretary Subhash Chandra Garg had said the government’s overseas borrowing in a year would not be more than $10 billion, about 10% of its total borrowing for the year. He had said the first issuance would take time for preparation and would likely happen only in the second half of the year.
Since then, former Reserve Bank of India governors C Rangarajan and Raghuram Rajan have cautioned against such borrowing. Those opposed to the idea have said the government could instead increase the limit for foreign investors in its bonds in the domestic market. Bond yields had declined immediately after the government announced the plan to borrow overseas.
RBI Governor Shaktikanta Das had said, in an interview to ET published on July 22: “RBI is the debt manager to the government. There is a process of consultation between the RBI and the government on matters relating to the borrowing programme.”
Das said the process of consultation has already started. “We have given our inputs and conveyed our views to the government.
So, whatever we have to say to the government in the matter we have indicated internally,” he had said.