Govt. to borrow Rs 5.03 lakh cr to fund revenue gap


By MYBRANDBOOK


Govt. to borrow Rs 5.03 lakh cr to fund revenue gap

The government plans to borrow Rs 5.03 lakh crore in the second half of the current fiscal to fund the revenue gap in the pandemic-hit economy, as per the finance ministry. The Government decided that the borrowing will be conducted in 21 weekly moieties of around Rs 24,000 crore each, in advisory with RBI.

 

During the first half, the government has raised Rs 7.02 lakh crore by issuing bonds, the ministry said in a statement. Along with the H2 projection that also factors requirements for release of balance amount to states on account of back-to-back loan facility instead of GST compensation during the year, it added.

 

According to the Budget for 2021-22, the government’s gross borrowing was evaluated at Rs 12.05 lakh crore, while net borrowing was fixed at Rs 9.37 lakh crore in the financial year beginning April 1.

 

“Borrowing in H1 has been completed smoothly with a weighted average yield at 6.19 per cent and weighted average maturity at 16.69 years. In H1, good demand for government bonds was seen from all major investor segments and the yields have remained stable,” the ministry said.

 

The government will continue to execute switching of securities to equalize redemptions in the coming years. The budget has set fiscal deficit at 6.8% for the next fiscal, down from 9.5% of the GDP in the current financial year.

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