Government to borrow Rs 4.42 lakh crore in H1FY20

The government has already rolled overpayments of the fertiliser and petroleum subsidies to the next fiscal year.
Economic Affairs Secretary Subhash Chandra Garg (File Photo | PTI)
Economic Affairs Secretary Subhash Chandra Garg (File Photo | PTI)

NEW DELHI: Announcing the borrowing calendar for the first half of the next financial year (April to September 2019), the Union Ministry of Finance on Friday said that the government will borrow Rs 4.42 lakh crore during the period. 

Economic Affairs Secretary Subhash Chandra Garg said the government will raise the Rs 4.42 lakh crore through gilts and that borrowing for the second half is set at Rs 2.68 lakh crore. In the current fiscal year set to end on Sunday, borrowing for the whole year is estimated at Rs 5.71 lakh crore.

As per the Union Budget, the government’s gross borrowing was pegged at Rs 7.1 lakh crore for 2019-20, which also includes repayments of past loans. Net borrowing was pegged at Rs 3.4 lakh crore in the first half of the next fiscal.

Speaking on the borrowing calendar, Garg attributed the high borrowing to repayment obligations. “There is a repayment obligation of Rs 1.02 lakh crore in the first half of the new financial year and Rs 1.35 lakh crore in the second half,” he stated. 

The government has already rolled overpayments of the fertiliser and petroleum subsidies to the next fiscal year. Apart from these, there would be payment obligations towards the National Small Savings Fund, which was used by the government to clear payments towards food subsidies.

However, India’s April-February fiscal deficit has already touched Rs 8.51 lakh crore ($123.07 billion), or 134.2 per cent of the budgeted target for the current fiscal year, government data showed on Friday.

The government has already revised the fiscal deficit target for 2019-20 from 3.3 per cent to 3.4 per cent of GDP. According to Devendra Kumar Pant, chief economist, India Ratings and Research (Fitch Group), “fiscal deficit at 134.2 per cent of revised estimate is originating mainly from receipt side”.

“Slow pace of tax collection will keep the pressure on fiscal deficit. A higher GDP number than the one used in the budget will help government inch closer to the FY19 fiscal deficit target of 3.4 per cent of GDP,” Pant added.

In a separate statement on Friday, the finance ministry said that it has received Rs 13.37 lakh crore in revenue so far this year. Of this, Rs 10.93 lakh crore was tax revenue, Rs 1.71 lakh crore was non-tax revenue and Rs 71,662 crore was non-debt capital receipts.

While the divestment target has been met, tax collections still remain short of the annual target and sources say that revenue collection may fall short by Rs 70,000 crore to Rs 75,000 crore this fiscal.

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