The Indian government has lowered the additional borrowing requirement for the current fiscal to £2 billion from £5 billion as estimated earlier. Just last month, the government, after consultation with the RBI, had said it would make an additional borrowing of £5 billion this fiscal through dated securities. There, however, will be no change in the net borrowings as envisaged in the budget for 2017-18. The reduced borrowing would help contain fiscal deficit within the target.
A decline in revenue collections from the Goods and Services Tax, and lower non-tax revenue have caused stress to the government about meeting the fiscal deficit target. According to the latest figure, fiscal deficit in November 2017 had breached budget target and touched 112 per cent of the budget estimate for 2017-18 mainly due to lower GST collections and higher expenditure.
Economic Affairs Secretary Subhash Chandra Garg tweeted the news, “Government has reassessed additional borrowing requirements taking note of revenue receipts and expenditure pattern. Requirement of additional borrowing being reduced from £5 billion as notified earlier to £2 billion.” The government has budgeted gross and net market borrowings at £58 billion and £42.3 billion, respectively in 2017-18.
