New Delhi: The government will in the current fiscal borrow Rs 6 lakh crore, up from Rs 5.63 lakh crore last year, as it repays past liabilities and uses debt to bridge revenue shortfall. However, the net borrowings will be Rs 4,61,204 crore, after considering repayments of past loans and interests. This is nearly Rs 7,700 crore lower than Rs 4,68,901 crore in 2013-14, according to Budget 2014-15 presented by Finance Minister Arun Jaitley in Parliament.
The government is in the process of borrowing Rs 3.68 lakh crore in the first half of this fiscal, accounting for 61.3 per cent of the total budget target for 2014-15, which will leave more scope for private sector to tap the market in the second half. The front-loading of borrowing is aimed at making available capital to the private sector in the second half of 2014-15. The net borrowing through T-bill for first quarter (April-June) was kept at Rs 40,000 crore.
During the fiscal, repayments of loans have been estimated at Rs 1.38 lakh crore as against Rs 95,008 crore a year ago. Finance Minister said that the fiscal deficit - the gap between expenditure and revenue - will be 4.1 per cent of GDP. In absolute term, the fiscal deficit estimated at Rs 5,31,177 crore during 2014-15 as compared to Rs 5,24,539 crore in the previous fiscal. "My predecessor has set up a very difficult task of reducing fiscal deficit to 4.1 per cent of the GDP in the current year.
Considering that we had two years of low GDP growth, an almost static industrial growth, a moderate increase in indirect taxes, a large subsidy burden and not so encouraging tax buoyancy, the target of 4.1 per cent fiscal deficit is indeed daunting," the Finance Minister said. "Difficult, as it may appear, I have decided to accept this target as a challenge. One fails only when one stops trying," he added.
