The government has pegged its gross borrowing at Rs.3.72 lakh crore for the first six months of the full year’s…
Representational image (Photo: Getty Images)
The government has pegged its gross borrowing at Rs.3.72 lakh crore for the first six months of the full year’s target of Rs.5.8 lakh crore, Economic Affairs Secretary Shaktikanta Das said on Tuesday.
However, most of its borrowed funds will have to be spent for retiring old debt. During 2017-18, the government has to repay Rs.1.57 lakh crore to investors as bonds mature and come up for redemption. Of the total redemption, 90 per cent is happening in first half of 2017-18, Das said.
Advertisement
Hence, as the majority of funds will be spent in retiring previous debt, the government will be left only with Rs.2.3 lakh crore for expenditure towards other social schemes. The government borrows from the market to meet its yearly expenditure and gross borrowing includes loan and interest repayment.
Advertisement
Also, the nodal ministries will have more funds to spend due to the advancement of the Union Budget, Das said.
"The Budget is fully passed and the entire expenditure is available to Ministries for spending from April 1."
In financial year 2017-18, the government will borrow Rs.3.48 lakh crore from the market after buybacks, around Rs.75,000 crore lower than the ongoing financial year, Finance Minister Arun Jaitley said in his Union Budget speech.
According to the budget document, net borrowing is estimated at Rs.4.23 lakh crore and gross borrowing at Rs.8 lakh crore. It also projected a fiscal deficit of 3.2 per cent of GDP for 2017-18 as compared with 3.5 per cent in 2016-17.
Advertisement
