Economy

Government to borrow ₹5.03 lakh crore in H2 FY'22 to fund revenue gap

The government will borrow ₹5.03 lakh crore in the second half of the current fiscal to fund the revenue gap for reviving the pandemic-hit economy, the finance ministry said on Monday.

During the first half, the government has raised ₹7.02 lakh crore by issuing bonds, the ministry said in a statement.

"Out of gross market borrowing of ₹12.05 lakh crore projected for FY 2021-22 in the Union Budget, ₹7.24 lakh crore (60%) was planned to be borrowed in first half (H1).

"The effective borrowing in H1 of FY 2021-22 was Rs 7.02 lakh crore. The Government now plans to borrow the balance ₹5.03 lakh crore in second half year (H2) of FY 2021-22," it said.

The H2 projection also factors requirements for release of balance amount to states on account of back-to-back loan facility in-lieu of GST compensation during the year, it added.

According to the Budget for 2021-22, the government's gross borrowing was estimated at ₹12.05 lakh crore, while net borrowing was pegged at ₹9.37 lakh crore in the financial year beginning April 1.

Gross borrowing includes repayments of past loans. Repayment for past loans in the next financial year has been pegged at ₹2.80 lakh crore.

The government raises money from the market to fund its fiscal deficit through dated securities and treasury bills.

The Budget has pegged fiscal deficit at 6.8% for the next fiscal, down from 9.5% of the GDP in the current financial year.


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Printable version | Oct 26, 2021 3:01:35 AM | https://www.thehindu.com/business/Economy/government-to-borrow-503-lakh-crore-in-h2-fy22-to-fund-revenue-gap/article36703048.ece

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