MADRAS, Dec 15: India’s Finance Minister Yashwant Sinha said on Saturday India needed additional market borrowings to meet a revenue shortfall.

He said tax revenues had declined since last year and the extent of market borrowings had already reached the level targeted for the year to March 2002.

“We have almost reached the target of government borrowing which we had set in the budget. And certainly to meet the revenue shortfall, we would have to go for additional market borrowing,” Sinha told a news conference in the southern city of Madras.

Sinha said customs and corporate tax collections were lower than last year and personal income tax revenue was only slightly higher.

“I will be candid in telling you that the economic slowdown is having its impact on revenue collections,” he said.

Last week, the government breached the 2001/02 budget target for dated government borrowings, when it announced two bond auctions totalling 60 billion rupees ($1.26 billion).

The bond auctions boosted government borrowings through dated bonds this year to 1.01 trillion rupees against a target of 993.52 billion set in the budget last February.

Sinha said the government was still trying to meet revenue targets for the year but added he saw a high fiscal deficit as the obvious fallout of a failure to meet them.

“The revenue situation is a matter of concern. While collections in the first quarter were quite dismal, there seems to have been some pick up in subsequent months but not as much as we need to see,” he said.

“We are trying to ensure that collections improve but if we don’t reach the target the consequence will be a high fiscal deficit to shore up the revenue shortfall.”

Analysts said the comments meant the government would again miss its fiscal deficit target of 4.7 per cent of GDP this year.

India has had a dismal record in meeting its annual deficit target. The deficit widened to 5.2 per cent of gross domestic product in 2000/01 (April-March) due to an economic slowdown.—Reuters