Centre to borrow Rs 14.01 lakh crore in FY25, lower than interim Budget estimate

The FM presented the Economic Survey 2023-24 in the Lok Sabha on Monday

The Centre marginally cut the gross borrowing target from the markets in 2024-25 to Rs 14.01 lakh crore to finance its fiscal deficit of 4.9 percent of the GDP, Finance Minister Nirmala Sitharaman announced on July 23, in a speech presenting the full Budget for 2024-25.

This is Rs 1.4 lakh-crore lower compared to the estimate of Rs 15.43 lakh crore for FY24.

In percentage terms, the Centre's gross borrowing is 8.4 percent lower than the FY24 figure, while for net borrowing the reduction is a much lower 0.4 percent compared to the previous fiscal's figure.

The sharply lower gross borrowing figure for FY25 is a result of the central government's focus on aggressive consolidation as it looks to meet a sharply lower fiscal deficit target.

The borrowing number is key since the central government finances its fiscal deficit mainly through issuing dated securities.

Out of gross market borrowing estimated for FY25, Rs 7.50 lakh crore (53.08 percent) is planned to be borrowed in the first half (H1) through dated securities, including Rs 12,000 crore through issuance of Sovereign Green Bonds.