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Home » IANS » Covid pushes govt to borrow full Rs 12 lakh cr for FY21 by Dec

Covid pushes govt to borrow full Rs 12 lakh cr for FY21 by Dec

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New Delhi, Sep 10 (IANS) The government proposes to exhaust its entire borrowing of Rs 12 lakh crore for FY21 by December as it looks to step up expenditure to stimulate the economy hit by the Covid-19 pandemic.

Government sources said that the aim is to exhaust the entire borrowing space early to give a lift to the economy during the current unlock phase.

If need be, additional borrowing would be done for one or two months early next year to mobilise resources for any additional expenditure, sources said.

In May, the government raised the targeted levels of borrowings in the current fiscal by over 50 per cent to meet additional Covid-19 related expenditure. With this, the estimated gross market borrowing in the financial year 2020-21 increased to Rs 12 lakh crore in place of Rs 7.80 lakh crore as per budget estimate.

With the change in borrowing plan for FY21, the government had also modified the indicative calendar for issuance of government dated securities for the first half of fiscal 2020-21 in consultation with the Reserve Bank of India.

So, instead of H1 borrowing of Rs 4.88 lakh crore as per budget estimates, the RBI will now conduct auctions of dated securities worth Rs 6 lakh crore till September 30.

The calendar would include issuance of dated securities with maturity ranging from 4-40 years. It will also have an auction of floating rate bonds. Each block of auctions, over a 5 day period, will be of Rs 30,000 crore.

Like in the past, the RBI, in consultation with the government, will continue to have the flexibility to bring about modifications in the auction calendar in terms of notified amount, issuance period, maturities, etc. and to issue different types of instruments.

Already the plan for H2 borrowing is being finalised and would have even more aggressive auctions from the RBI so that entire borrowing is completed by December.



(This story has not been edited by Newsd staff and is auto-generated from a syndicated feed.)
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