The Centre said on Wednesday it would borrow an additional Rs 50,000 crore in the rest of this fiscal year. The decision is likely to take the fiscal deficit for 2017-’18 beyond the government’s target of 3.2% of the Gross Domestic Product.
The additional borrowing is expected to help the government perk up its fiscal health after collections of Goods and Services Tax declined for the second month in a row in November, according to PTI.
The additional expenditure will come through the issue of dated government securities, the Ministry of Finance said. The net borrowing, however, will remain as budgeted, as the government will cut down on the amount it raises through Treasury bills, the ministry said.
The government borrows from the market to meet its yearly expenditure – gross borrowing includes, in addition to net borrowing, repayment of interests and loans. Treasury bills have a less-than-one-year maturity, while dated government securities are issued for five years or more.
In its Union Budget for 2017-’18, the government had pegged gross borrowing of Rs 5.80 lakh crore and net borrowing of Rs 4.23 lakh crore. This included a planned borrowing of Rs 3.48 lakh crore through dated securities and Rs 2,002 crore from Treasury bills.
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