Last Updated : Sep 30, 2020 07:03 PM IST | Source: Moneycontrol.com

Government to borrow Rs 4.34 lakh crore in second half of FY21 as planned in May

Out of the estimated Rs 12 lakh core borrowing for the full year, the government has already borrowed Rs 7.66 lakh crore, which accounts for 63.8 percent of the target

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The government would borrow Rs 4.34 lakh crore in the second half of FY21 and there would be no change in its Rs 12 lakh crore borrowing plan for the whole year as was decided in May.

"The borrowing target was raised to Rs 12 lakh crore in May from the originally budgeted figure of Rs 7.6 lakh crore keeping in mind the economic fallout of the covid-19 pandemic, and the decision was to stick to this as per current estimates," economic affairs secretary Tarun Bajaj said at a briefing on September 30.

Out of the estimated Rs 12 lakh core borrowing for the full year, the government has already borrowed Rs 7.66 lakh crore, which accounts for 63.8 percent of the target, Bajaj said.

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"We have decided to continue with the same figure of Rs 12 lakh crore for the entire year. Which means our borrowing for second half would be Rs 4.34 lakh crore or 36.1 percent of the Rs 12 lakh crore to be borrowed for the whole year," Bajaj said.

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The government aims to raise Rs 24,000 crore through two-year tenor, Rs 68,000 crore through 5-year tenor, Rs 96,000 crore through 10-year G-secs, Rs 90,000 crore through 14-year tenor, Rs 72,000 crore through thirty-year tenor, Rs 52,000 crore through 40-year tenor, and Rs 32,000 crore through floating rate bonds.

The government does not wish to crowd out private sector which might need to borrow as they continue to recover from the impact of the COVID-19 pandemic in the third and fourth quarters, Bajaj said.

Bajaj also said there would be no change in interest rates on small savings scheme for October-December.

The government in its internal estimates on revenue and expenditure, on the basis of which the borrowing figure was decided, factored in lower divestment receipts.

Bajaj said the government doesn't expect Rs 2.1 lakh crore in divestment receipts for FY21. He also said the government had factored in the need for an economic stimulus in the borrowing calculations.

First Published on Sep 30, 2020 07:03 pm