NEW DELHI, Feb 16 (PTI): In view of a higher expenditure to stimulate slowing economy, the Centre has proposed to borrow Rs 3,08,647 crore in the next fiscal, 17 per cent more from the than what it is about to take in this fiscal.
Following the higher borrowings, the interim budget, presented by Finance Minister Pranab Mukherjee in Parliament, pegged interest payments on this account at nearly 17 per cent higher at Rs 2,25,511 crore for the next fiscal.
The Centre had revised its borrowing a number of time due to rising expenditure to spur the economy, faced with slackening demand. Latest, it stepped up the borrowings by Rs 46,000 crore for the period between February 20 and March 20.
The fiscal deficit for the year was revised to 6 per cent of the GDP, compared to the budgeted figure of 2.5 per cent.
Also, there is a shortfall in revenue collections over the current expenditure with revenue deficit revised to 4.4 per cent of GDP, compared to 1 per cent in the budget estimates.
The market loans taken by the government in this fiscal has been revised to Rs 2,61,972 crore, higher from Rs 1,00,571 crore estimated earlier. The interest paid on account of the borrowing also stood revised at Rs 1,92,694 crore for the current fiscal.
Mukherjee attributed the deficit to the government’s proactive fiscal measures, initiated to counter the impact of the global slowdown, which is hurting the Indian economy.
Meanwhile, the country’s top private banker ICICI bank CEO Chanda Kochhar maintained that higher government borrowing was not a problem, even though it will impact interest rates. “That (borrowing) will have an implication on how interest rates will move. But the good news is that we can afford this,” she said.
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