The fiscal deficit target will go up by 10 basis points to 6.9 per cent of the GDP if the extra-budgetary borrowings of Rs 30,000 crore, which is massively down from Rs 1.3 lakh crore this fiscal, is added, according to a report.

The budget has pegged fiscal deficit at 9.5 per cent for FY21 and 6.8 per cent for FY22 excluding the off-budget borrowings of Rs 1.3 lakh crore and Rs 30,000 crore, respectively. But if we included these numbers, the deficit numbers would rise by 70 basis points to 10.2 per cent for FY21 and 6.9 per cent of GDP for FY22, according to an SBI Research report.

At 6.9 per cent for the centre and 4 per cent for the states, the combined market borrowings next fiscal will be Rs 23.3 lakh crore. Of this, the centre’s net borrowings are seen at Rs 8.9 lakh crore and gross borrowings at Rs 12.05 lakh crore in FY22.

Thus, the combined gross borrowing of the centre and the states in FY22 comes to 23.3 lakh crore while net borrowing stands at Rs 18.1 lakh crore which is similar to the level achieved in FY21, the report said.

The report stated that the government was using its off-budget borrowings on a massive scale through public sector agencies to avoid showing such borrowing in its own books.

But, there has been a progressive decline in extra-budgetary resources (EBR) for state-run units to Rs 3.47 lakh crore in FY22 from the revised Rs 3.88 lakh crore in FY21. EBR for petroleum and natural gas, steel and power has increased while that of others have come down.

This year, it has further reduced the EBR mobilised through National Small Saving Fund (NSSF) and fully serviced bonds to Rs 30,000 crore only from Rs 1.3 lakh crore in FY21.

When considered this along with fiscal deficit of 6.8 per cent of GDP estimated for FY22 it increases the gap to only 6.9 per cent of GDP. In FY21, the fiscal deficit including the EBR of Rs 1.3 lakh crore was 10.2 per cent of GDP compared to 9.5 per cent budgeted, says the report.

Meanwhile, the states’ gross borrowings have been revised upwards to Rs 8.7 lakh crore and net borrowings to Rs 7.2 lakh crore in FY21.

For FY22, with ceiling of net borrowing at 4 per cent of Gross State Domestic Product (GSDP) and additional 0.5 per cent of GSDP conditional borrowing by states, net borrowings are pegged at Rs 8.9 lakh crore and gross borrowings are expected to come around Rs 11 lakh crore after a repayment of Rs 2.1 lakh crore.

Total debt/liabilities of the centre were at Rs 107 lakh crore or 51 per cent of the GDP, up from 47 per cent in FY21, and 31 per cent for states, the combined debt to GDP ratio will be around 82. But if we added net borrowings in FY21 to FY20 liabilities it translates into debt of Rs 107.9 lakh crore or 86 per cent of GDP.

Meanwhile, the budget pegs FY20 GDP at Rs 204 lakh crore for FY20, which will fall to Rs 195 lakh crore in FY21, and improve to Rs 223 lakh crore in FY22 on a projected 11.5 per cent GDP growth. It will further rise to Rs 250 lakh crore in FY23 on a 6.8 per cent growth and then grow to Rs 277 lakh crore in FY24 and to Rs 310 lakh crore in FY25, the report said.