The government on Friday increased its market borrowing estimate by staggering Rs 4.2 lakh crore to Rs 12 lakh crore for the current fiscal to deal with the expected shortfall in revenue due to the impact of COVID-19 crisis on the economy.
The government resorts to market borrowing to make up for the mismatch between its revenue and expenditure. "The estimated gross market borrowing in the financial year 2020-21 will be Rs 12 lakh crore in place of Rs 7.80 lakh crore as per BE 2020-21.
The above revision in borrowings has been necessitated on account of the COVID-19 pandemic," the Finance Ministry said in a statement. The government has also increased the weekly borrowing target to Rs 30,000 crore from Rs 21,000 crore fixed on March 31.
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.