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India to borrow Rs 4.88 lakh crore in first half of FY21, says DEA Secretary Atanu Chakraborty

Out of gross borrowing of Rs 7.8 lakh crore, the government proposed to borrow 62.56% in the first half of financial year 2021

twitter-logo BusinessToday.In   New Delhi     Last Updated: March 31, 2020  | 21:37 IST
India to borrow Rs 4.88 lakh crore in first half of FY21, says DEA Secretary Atanu Chakraborty
In the Union Budget 2020, FM Nirmala Sitharaman had proposed gross borrowing of Rs 7.8 lakh crore for FY21

The central government plans to borrow Rs 4.88 lakh crore in the first half of the financial year 2020-21 (FY21) to mitigate the impact of coronavirus pandemic on the economy. This amounts to 62.56 per cent of the total proposed borrowing of Rs 7.8 lakh crore for FY21.

"Out of gross borrowing of Rs 7.8 lakh crore, it is proposed to borrow 62.56% in the first half of Financial Year 2021 as compared to 62.25% in the first half of Financial Year 2020," said Atanu Chakraborty, the Economic Affairs Secretary, on Tuesday.

The DEA Secretary said that borrowing plan has been drafted keeping in view the "anticipated demand because of the fully accessible route being opened for non-residents investors".

The WMA (Ways and means advances) limit at Rs 1.2 lakh crore would be reviewed on a need basis, he added.

He also announced that the government has planned to roll out the borrowings through Debt Exchange Traded Funds (ETFs).

Chakraborty made this announcement after the meeting of the Finance Ministry and Reserve Bank of India on government's borrowing plan for the first half of FY21 amid the lockdown to contain the spread of coronavirus.

In the Union Budget 2020, Finance Minister Nirmala Sitharaman had proposed net borrowing of Rs 5.36 lakh crore for FY21, compared to Rs 4.99 lakh crore estimated for the current financial year, which ends on March 31. "Net market borrowings for the year 2019-20 would be Rs 4.99 lakh crore and for the year 2020-21, it would be Rs 5.36 lakh crore," Finance Minister Sitharaman said during budget 2020.

As per the Budget, the gross borrowing, which includes repayments and past loans, has been pegged at Rs 7.8 lakh crore for FY21 versus Rs 7.1 lakh crore estimated for the current financial year. The repayment of past loans has been estimated at Rs 2.35 lakh crore for FY21.

The government raises funds from the market to fund its fiscal deficit through dated securities and treasury bills.

By Chitranjan Kumar with PTI inputs

Also Read: Coronavirus lockdown: MSMEs seeks govt help to ensure liquidity

Also Read: PPF rate slashed to 7.1%, lowest in 43 years; small savings rates cut up to 1.4%

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