NEW DELHI: With revenue collections seeing no signs of recovery, the government is considering
options to borrow more money this fiscal year, beyond its revised target of Rs 12 lakh crore. According to sources in the finance ministry, the government has already extended its borrowing target for this fiscal year. However, they may extend it further if they feel there is an requirement.
“The borrowing target has already been revised but this is not a normal year. The ministry is taking all the measures but if required, we can consider borrowing more,” a senior official from the finance ministry told TNIE. The Union government has sharply raised its gross borrowing programme for this fiscal from the budgeted Rs 7.8 lakh crore to Rs 12 lakh crore, signalling a major slippage in fiscal deficit amid rising pressures on both revenue and expenditure because of the Covid-19 pandemic.
Data released by the Controller General of Accounts revealed that the government’s direct tax collection from April to July, stood at Rs 1.49 lakh crore compared with Rs 2.21 lakh crore in the previous year. And while the total receipts for the first quarter of the fiscal stood at Rs 2.32 lakh crore, the expenditure was Rs 10.54 lakh crore, which is 34.7 per cent of budget estimate, despite all the austerity measures employed by the government to keep expenditure under cap.
However the official added, that the decision would be taken only after seeing the path of recovery in the second quarter. “Everything will depend on the quantum and speed of recovery by the end of the second quarter. The ministry will take stock of borrowing requirement after seeing the results,” the official added.
Any spike in borrowing can further push fiscal deficit targets of the government, which experts are claiming may even exceed beyond seven per cent this year.
Meanwhile, the government has already started tapping into external sources of borrowing. Data suggests that in the April-July period, India borrowed a record Rs 39,165 crore from multilateral agencies to meet its expenses on account of the various stimulus announced to handle the economic stress induced by Covid-19.
External debt spikes
Data suggests that in the April-July period, India borrowed a record Rs 39,165 crore from agencies to meet its expenses, primarily the various stimulus announced to beat Covid-19.