Additional borrowing to widen fiscal deficit, but help govt perk up economy

He did not think that the move will crowd out borrowings of the private sector, saying demand of the government and the private sector are not contradictory in these circumstances

The increased borrowing of Rs 12 trillion for 2020-21 against the budgeted Rs 7.8 trillion will widen the Centre’s fiscal deficit sharply and may increase inflationary pressure.

However, the government will get the funds to spur the sagging economy and take care of the health sector, needed for battling Covid-19.   

The fiscal deficit will widen to around 5.3 per cent of gross domestic product (GDP), against 3.5 per cent estimated in the Budget for 2020-21 if one assumes the economy will grow by 10 per cent at current prices, also estimated in the Budget.

However, in the current circumstances it is difficult