The government, today, raised the estimated gross market borrowing for FY 2020-21 to Rs 12 lakh crore from the budgeted Rs 7.8 lakh crore, to cushion the blow from the new
coronavirus pandemic.
The "revision in borrowings has been necessitated on account of the
COVID-19 pandemic", the government and the Reserve Bank of India said in two separate releases.
Together with the indicated increase in total borrowings for the year, a borrowing calendar for the remainder of the first half of the fiscal year has also been released.
As per the revised calendar, the government will borrow Rs 6 lakh crore from the market via gilts through the remaining part of the first half of the year. The auction size for each weekly auction will go up to Rs 30,000 crore from the week of May 11.
India has been in a
lockdown for eight weeks, causing massive economic losses and prompting Moody's to forecast a 0% growth for the country this year.
In March, Economic Affairs Secretary Atanu Chakraborty had said that the government was planning to borrow more aggressively than anticipated in the April-September period to mitigate the coronavirus outbreak.
"Government shall do whatever is required to do for the resurgence and recovery of the industries. Our fund-raising resources not only from the markets but also from multilateral agencies are geared towards that," Chakraborty said.
Finance Minister Nirmala Sitharaman in her Budget for 2020-21 had pegged gross
borrowing in the new financial year at Rs 7.8 lakh crore, higher than Rs 7.1 lakh crore estimated for 2019-20.
With the increase in the
borrowing estimate, the government would have to revise upwards its fiscal deficit target from 3.5 per cent pegged for the current fiscal.
With Agency inputs