Economists say the shortfall in tax revenues this year for the government will be almost 1 percent of GDP, due to weak economic activity.
The government, on May 9, said it will borrow an extra Rs 4.2 lakh crore this fiscal. Initially, its gross borrowing target was Rs 7.8 lakh crore. That has now been increased to Rs 12 lakh crore. Economists say the shortfall in tax revenue in FY21 for the government will be almost a percent of the GDP due to weak economic activity. In this edition of Business Insight, find out why is the government borrowing Rs 4.2 lakh crore more and what are the implications of higher government borrowing.