Network18 Exclusive: Government's FY23 borrowing could be lower by Rs 65,000 crore

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Government borrowing in the next fiscal year could be lower by Rs 65,000 crore, sources told CNBC TV-18, as the Reserve Bank of India (RBI) announced it will switch short tenor bonds worth the same amount with longer tenor bonds.

Also Read: As Budget 2022 sledgehammers with high borrowing, bond market fumes

The fiscal 2022-2023 gross market borrowing was mentioned as Rs 14.95 lakh crore in the budget presented by Finance Minister Nirmala Sitharaman on February 1. This is a rise of 40 percent from the last budget.

India's sovereign benchmark yield surged up to 24 basis points on February 1, climbing to its highest level in more than two months in response to higher-than-expected market borrowing numbers announced in the budget speech.

Also, the fiscal deficit for the current financial year is expected at 6.9% of GDP, which is slightly more than the 6.8% targeted earlier. For the next fiscal year, a deficit of 6.4% is targeted, which is higher than expected and has stoked concerns.

All this comes as the budget of Rs 39.45 lakh crore for FY23 is focusing on infrastructure spending to boost revival from the pandemic.

The finance minister bumped up capital expenditure by 35% again to Rs 7.50 lakh crore in the budget amid rising inflation. In the last budget, a capex allocation of Rs 5.5 lakh crore for 2021-22 also meant a 35% rise from a year ago.