The Reserve Bank today said the government's cash balance with it will cross Rs 1 trillion- mark this fiscal, with the Finance Ministry likely to save an additional Rs 5,000 crore through the remaining part of this financial year.
"The government's cash balance is quite comfortable and as per the Budget estimate, it will increase by additional Rs 5,000 crore over the last year's closing balance. They will be building a slightly higher cash balance. Current level is around Rs 1 trillion," Deputy Governor H R Khan, who is in charge of the government finances department at the Mint Road, told reporters at the customary post-Budget press meet.
The cash balance numbers are interesting as normally government and the RBI do not officially share the cash balance of the government parked with the central bank.
It can be noted that to meet the projected 5.3 per cent fiscal deficit, North Block has forced other ministries to cut down their planned expenditure by around 10 per cent on an average. So far this fiscal, the government has spent only 96 per cent of its budgeted expenditure.
Finance Minister P Chidambaram finally pegged the fiscal deficit at 5.2 per cent for this financial year and 4.8 per cent for the next fiscal.
Another Deputy Governor Urjit Patel, while hailing the Budget as offering "a credible roadmap for fiscal consolidation and lowering inflation," said the fiscal deficit measures will go a long way in fighting inflation as well as fiscal correction.
In this regard he also welcomed the proposal to launch an inflation-indexed bonds, which will help fight inflation.
The press briefing was also attended by another Deputy Governor Anand Sinha.