New Delhi: Due to the fierce impact of coronavirus on the economy, the Centre has said it will borrow about Rs 4.2 crore more than the budgeted estimate of Rs 7.8 lakh crore in the 2020-21 fiscal year.
The fresh borrowing will take the total borrowing estimates of the government to Rs 12 lakh crore.
According to economists, the increased borrowing limits will also lead to surge in the fiscal deficit target of the government from 3.5 per cent to 5.5 per cent in 2020-21, which is a big push.
The fall in tax and non-tax revenues amid the lockdown are likely the reason behind the revised borrowing calendar by the department of economic affairs. “The government has estimated Rs 24.23 lakh crore tax collection for the year, but two months of lockdown puts a total of Rs 4 lakh crore under pressure and with not more than 20 per cent attainable through limited activity,” a CARE Rating note read.
Besides this, the government may also fall short to achieve its disinvestment target of Rs 2.1 lakh crore in the current fiscal year.
Therefore, the borrowings would make room for government expenditure and offset the expected revenue shortfall. This could also trigger the economy to show signs of recovery in the later part of this fiscal year, credit-rating agency ICRA told Business Today.
