The government will raise by September more than half of its record $100 billion planned borrowing for the financial year that begins

on April 1, a top adviser said on Tuesday, allowing more space for private borrowing as the economic growth picks up steam.

Montek Singh Ahluwalia, deputy chairman of the Planning Commission, said the federal government would have no problem in managing its borrowing plan for the 2010/11 fiscal year.

"India can raise more funds in the first half depending on the economic circumstances," Ahluwalia told reporters, without mentioning the exact borrowing figure.

Asia's third largest economy is seen expanding over 8.5 per cent in 2010/11, accelerating to 9 per cent the year after.

Borrowing a higher proportion in the first half of the year would also be cheaper for the federal government, with interest rates on a hardening path along the year on rising inflationary pressures and greater demand for funds.

The heavy borrowing plans, needed to fund the estimated 5.5 per cent fiscal deficit for the year, has had analysts concerned it would make funding costlier and scarcer for industry.

Finance Secretary Ashok Chawla said the government and the Reserve Bank, its debt manager, would decide on the borrowing schedule by end-March.

Analysts expect the central bank to hike its key lending rate by April to help tame wholesale price inflation (WPI) that stood at 8.56 per cent in January.

India borrowed 65 per cent of its 2009/10 borrowing of 4.51 trillion rupees during the first half of the current fiscal year.

Ahluwalia also said India would have to raise state-set retail fuel prices if crude oil prices continued to rise.

India partially subsidises oil marketing firms to sell fuel at below-market rates to customers and this has contributed to its fiscal deficit.