The Centre will be borrowing about Rs 12 trillion in fiscal 2021-22, as it pegged fiscal deficit at 6.8 per cent of the gross domestic product (GDP).
Finance Minister Nirmala Sitharaman said the government will be borrowing Rs 80,000 extra in this fiscal to meet its deficit for 2020-21, pegged at 9.5 per cent of the GDP. Therefore, the total gross borrowing this fiscal would be Rs 14 trillion.
The yields on the 10-year bond jumped past 6 per cent to trade at 6.09 per cent at 12:30pm.
ALSO READ: Budget 2021 LIVE: No change in personal tax slab; ITR relief for pensioners
The government plans to bring down the fiscal deficit at 4.5 per cent by 2025-26 in a "fairly steady" manner over the period. The Finance Minister will be tabling a deviation statement on Fiscal Responsibility and Budgetary Management Act (FRBM) to enable this. Under the FRBM Act mandated the govenrment to bring down the fiscal deficit to 3 per cent by 2020-21, which is not possible now because of the pandemic, the Finance Minister said.
The borrowing from states will also be heavy as they can now push their deficits to 4 per cent of the state GDP, but they will have to bring down the deficit to 3 per cent by 2023-24, in line with 15th Finance Commission recommendatins, the FM said.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.