NEW DELHI: Despite the prospects of low revenue collection as a fallout of the Covid-19 pandemic and bleak divestment proceeds, the Centre on Wednesday said it will not breach its borrowing target of
Rs 12 lakh crore for the current financial year (2020-21).
Therefore, the government will borrow only Rs 4.34 lakh crore in the second half of 2020-21 as planned. In the first half, the Centre had borrowed Rs 7.66 lakh crore.
Explaining the rationale for sticking to the original borrowing plan, Tarun Bajaj , secretary, Department of Economic Affairs (DEA), said the government expects revenue collection to improve going forward.
“We don’t envisage the need for higher borrowing. However, we are keeping some space for states and the private sector. We expect states to come and borrow from the market to meet their expenses. Besides we expect the private sector to also borrow in Q3 and Q4,” said Bajaj.
The DEA secretary added that the government is working on revising the divestment target, but he refused to divulge any further details on the same.
The borrowing for the second half, which is 36% of the FY21 target, will be conducted in 16 weekly tranches of Rs 27,000 crore that will conclude in January, saving February and March for borrowing by states.
According to experts, the finance ministry might announce another borrowing around November, when a stimulus package is expected to be announced.