Govt will not go for additional borrowing: FM Nirmala Sitharaman

NEW DELHI:  Finance Minister Nirmala Sitharaman on Wednesday said the government is not going for additional borrowing to fund additional demand for a grant of Rs 3.25 lakh crore. Responding to members’ query in Rajya Sabha, the finance minister said the government in September itself had said it is not going to borrow more and that there is enough tax buoyancy to fund the additional demand for grants.  

“We announced the borrowing schedule for the second half of the year in September. We have not changed our borrowing plans. That means we are very clear that we are going to see that the revenue that we are generating is sufficient for this additional grant,” she said. The government is likely to borrow Rs 14.21 lakh crore during 2022-23.

To support her point, the minister added that in the first seven months of the current fiscal, the gross tax receipts have seen a growth of 18% over the previous year. “This is substantially higher than the budget growth estimate of 9% over the RE (revised estimate) of last year. So, there is enough buoyancy that gives me confidence that we will be able to fund this additional demand,” she said.

She responded to many concerns and apprehensions raised about the economy. On the concern that private investments are not happening, the FM cited several examples to establish that private investment has begun to pick up. Non-food bank credits have been expanding at double-digit on a yearly basis since April 8, 2022, and have reached 17.9% on the week, 

she said. The FM pointed out how the government dealt with the twin balance sheet problem and as a result of those efforts gross NPAs have come down to a six-year low of 5.9% in March. “Corporate sector has been deleveraging as is evident in the declining core debt of private non-financial sector to 87.8% of the GDP in June 2022 from 97.4% in March 2016,” she said. 

Sitharaman further said together with this cleanup of the twin balance sheet problem (banks with highly stressed assets and over-leveraged corporate), the government is taking steps like the National Monetisation Pipeline, Gati Shakti and PLI scheme – all of which are bringing back investors so manufacturing sector gains momentum.